Circle and Robinhood Tumble After Coinbase Pulled Support for Federal Bill

TLDR

• Major crypto stocks plunged January 15-16 after Coinbase CEO Brian Armstrong rejected the CLARITY Act
• Circle fell 9.67%, Robinhood dropped 7.78%, Coinbase lost 6.49%, and Strategy declined 4.68%
• Senate Banking Committee postponed the scheduled vote following Armstrong’s withdrawal of support
• Over $20 billion evaporated from crypto-related stocks in a single trading session
• Industry remains split with Kraken, Ripple, and Circle backing the bill while Coinbase opposes it

Major cryptocurrency stocks suffered heavy losses after Coinbase announced it would not support federal crypto legislation. The decision sparked a widespread sell-off that wiped out billions in market value.

Circle stock dropped 9.67% to $76.60. Robinhood shares fell 7.78% to $110.36. Coinbase declined 6.49% to $239.26. Strategy closed 4.68% lower at $170.93.

Circle Internet Group, CRCL

The downturn began late January 14 when Coinbase CEO Brian Armstrong released a statement opposing the CLARITY Act. He said the current draft would be “materially worse than the current status quo.” Armstrong stated his company preferred no legislation over a flawed bill.

The Senate Banking Committee responded by canceling a markup session planned for January 15. The postponement created uncertainty across the crypto sector.

Losses Spread Across Digital Asset Companies

The sell-off extended far beyond major exchanges. Exodus plummeted 11.09%. Bitmine lost 5.48%. CleanSpark fell 4.42%. Riot Platforms declined 4.33%.

MARA, Bitfarms, Bullish, and Canaan recorded losses ranging from 3% to 6%. PayPal, Block, SharpLink, Metaplanet, Hut 8, Neptune, and GREE all traded lower. Total market value lost exceeded $20 billion.

Smaller companies faced similar pressure. American Bitcoin Corp dropped 4.26%. Meliuz declined 6.03%. Gemini, Bit Digital, and Semler Scientific all finished in the red.

Few stocks escaped the downturn. Galaxy Digital surged 13.46% on over $849 million in volume. Bitdeer gained 3.39%. Nexon and Net Holding also posted gains. Strategy rebounded 3.5% on January 16 as Bitcoin prices recovered.

Understanding the CLARITY Act

The CLARITY Act is bipartisan legislation that passed the House in July 2025. The bill establishes regulatory standards for digital assets. Stablecoins fall under separate legislation known as the GENIUS Act.

Armstrong’s opposition focuses on the Senate draft released in early January 2026. He criticized changes that reduce the Commodity Futures Trading Commission’s authority. The CFTC was designated as the primary regulator in earlier versions.

The CEO also opposed provisions affecting decentralized finance privacy, stablecoin rewards, and tokenized securities. He argued these changes represent a step backward from existing regulations.

Robinhood CEO Vlad Tenev offered a contrasting view. He called for U.S. leadership on crypto policy. Tenev supports passing legislation that protects consumers while enabling innovation. He acknowledged the bill needs work but sees progress as achievable.

Industry Divided on Path Forward

Several major firms continue supporting the legislation. Kraken, Ripple, Circle, and Andreessen Horowitz maintain their backing. These companies argue the bill replaces unclear enforcement with defined rules.

Proponents believe the framework helps U.S. companies compete internationally. They say it reduces legal uncertainty hampering product development.

Critics raise surveillance and consumer protection concerns. Some Democrats and privacy advocates warn the bill shifts too much power from the Securities and Exchange Commission to the CFTC. They argue this weakens oversight.

Disputed provisions include stablecoin reward programs, privacy in decentralized finance, and tokenized equity regulations. These issues remain under discussion as Senate negotiations continue.

Circle recorded $1.2 billion in trading volume during the sell-off. Coinbase saw $83.4 million in activity. Traditional markets showed strength with the Dow rising 292 points to 49,442. The S&P 500 closed at 6,944 and the Nasdaq finished at 23,530.

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