Crypto market faces pressure as Senate stalls stablecoin bill
BTC’s price has dropped to $93,860
Bitcoin's recent rally has encountered headwinds as U.S. political dynamics and shifting investor sentiment introduce new uncertainties.
The cryptocurrency's price has dipped to approximately $93,860, reflecting a 0.15% decrease, amid concerns over stalled regulatory efforts and declining demand from U.S. investors.
Key takeaways
- Regulatory Stalemate: Senate Democrats' withdrawal of support for the GENIUS Act.
- Declining U.S. Investor Demand: The Coinbase Premium Index, a metric indicating U.S. investor interest in Bitcoin, has turned negative, suggesting a decrease in domestic demand and contributing to downward pressure on Bitcoin's price.
- ETF Inflows Provide Some Support: U.S.-listed spot Bitcoin ETFs have experienced net inflows totaling $4.5 billion between April 22 and May 2, indicating sustained institutional interest.
Regulatory stalemate
A significant factor contributing to market apprehension is the hesitation among Senate Democrats to advance the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. This reluctance stems from ethical concerns regarding President Donald Trump's involvement in crypto ventures.
The GENIUS Act, aimed at establishing a regulatory framework for stablecoins, has encountered opposition from Senate Democrats. Their concerns center on President Trump's potential financial gains from crypto ventures, particularly the involvement of his family in World Liberty Financial's substantial deal with Binance. This opposition has introduced uncertainty into the legislative process, affecting market confidence.
Declining U.S. investor demand
The Coinbase Premium Index's shift into negative territory reflects a waning appetite for Bitcoin among U.S. investors. This decline in demand is a contributing factor to the recent decrease in Bitcoin's price, signaling potential shifts in market dynamics.
According to CryptoQuant, there are signs that demand for Bitcoin from U.S. investors is weakening again.
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“The premium had recovered significantly over the past month, but it’s now declining once more — in line with the recent correction in BTC’s price,” said AbramChart, a contributor at CryptoQuant.
ETF inflows provide some support
Contrasting the decline in retail investor interest, institutional investment through U.S.-listed spot Bitcoin ETFs has remained robust. The inflows suggest that, despite regulatory and demand concerns, institutional confidence in Bitcoin's long-term value persists.
As Bitcoin and the broader crypto market await the Federal Reserve’s interest rate decision on Wednesday, BTC’s price has dropped to $93,860.
BTC price dynamics (April - May 2025). Source: TradingView
Bitcoin's market trajectory is currently influenced by a complex interplay of regulatory challenges and shifting investor sentiment. While institutional investments provide some support, the broader market remains cautious amid ongoing legislative uncertainties and declining retail demand. Stakeholders will be closely monitoring developments in U.S. crypto regulation and investor behavior in the coming weeks.
We've informed you before Bitcoin price trades near $94K amid mixed technical indicators and sentiment divergences.
