Senate Scrambles to Save Crypto Bill After Coinbase Says No Deal

TLDR

• The Crypto Fear & Greed Index dropped 12 points to 49 on Friday, moving from “greed” to “neutral” territory
• Coinbase CEO Brian Armstrong withdrew support for a Senate crypto market structure bill, calling it “materially worse than the current status quo”
• Senate Banking Committee cancelled its Thursday markup of the crypto bill, citing the need for more support
• Senate Agriculture Committee postponed its markup to late January for the same reasons
• Senate Democrats are planning a Friday call with crypto industry representatives to discuss the legislation

The crypto market saw a shift in sentiment this week as a key piece of US legislation hit unexpected roadblocks. The move came after Coinbase withdrew its support for the bill.

The Crypto Fear & Greed Index fell from 61 to 49 on Friday. This marked a drop from “greed” territory into “neutral” range within 24 hours.

The index had reached its highest point since October 10 on Thursday. That same day in October, the crypto market experienced $19 billion in liquidations.

Bitcoin had climbed about 5% to $97,870 on Thursday. Santiment, a crypto sentiment platform, said the rise was justified by smart money accumulation and retail traders selling.

Industry Split Over Bill Provisions

The shift in sentiment came after concerns emerged about a Senate version of crypto market structure legislation. The bill aims to divide regulatory oversight between US market watchdogs.

Several crypto executives raised issues with specific provisions in the bill. One major concern focused on restrictions placed on stablecoin yields.

Following the backlash, the Senate Banking Committee cancelled its Thursday markup session. The committee cited the need for additional time to gather support for the measure.

The committee has not announced when or if the markup will be rescheduled. The Senate Agriculture Committee also delayed its planned Thursday markup to late January.

Democrats Schedule Industry Call

Senate Democrats are organizing a call with crypto industry representatives for Friday. The call comes less than two days after the committee hearing postponement.

Democrats from both the Senate Banking Committee and Senate Agriculture Committee will participate. Several crypto policy advocacy organizations will also join the discussion.

The stablecoin rewards programs compromise will likely top the agenda. Democrats, Republicans, bank lobbyists and crypto representatives had been working to resolve this issue.

Some Democrats and Republicans were already resistant to the draft bill before Coinbase withdrew support. This made the committee’s work uncertain even without the high-profile exit.

The Senate Agriculture Committee maintains its January 27 markup date. This hearing is still scheduled to move forward as planned.

Bitcoin traded at $95,480 at the time of publication. The price dropped 0.83% over the previous 24 hours according to CoinMarketCap data.

Some industry voices view the delays positively. Crypto venture capitalist Kyle Chasse called the postponement “a BULLISH signal” on Friday.

Chasse noted that markets held steady despite expectations of decline. He emphasized that the market “didn’t” get damaged as many predicted.

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