$370M Liquidated From Crypto Markets as CLARITY Hangs in the Balance

Crypto markets are expected to face extreme volatility over the next 48 hours, with the critical CLARITY cloture vote and Wednesday’s FOMC meeting casting doubt over all digital assets.

Despite over $370M being liquidated from crypto markets, $SOL ETF flows suggest institutional players maintain a constructive view on Solana and its ecosystem.

$BTC Falls 4% as Markets Lose Confidence in CLARITY

CLARITY is going down to the wire, and the level of tension and uncertainty at play is clearly visible in crypto markets. Digital assets rallied after Senator Lummis released the Bill’s final text on Sunday night, with $BTC rising 4% to trade hands as high as $79,000 on Monday’s open.

As it turns out, the Democrats had other plans. Despite claims that Lummis’ final text acquiesced to 126 demands the Democrats reportedly rejected the bill due to ethics language, before issuing a counteroffer.

Ahead of today’s critical cloture vote, the Republicans have rejected the proposed counteroffer, leaving negotiations in a deadlock. With CLARITY’s approval looking unlikely, crypto markets have since taken a nose dive.

Markets wasted no time ceding ground back to bearish forces, with $BTC giving back the 4% gain it enjoyed at Monday’s open. According to Coinglass data, over $381M has been liquidated across both long and short positions.

Prediction markets witnessed a similar downturn. CLARITY approval odds across all timeframes have plummeted, with chances of the bill passing before the end of the year falling to 14%.

CLARITY’s dismissal would strike a hard blow for crypto builders in the United States. Chainlink Senior Director Chris Barrett argues that if CLARITY is not passed, the nation risks seeing “the next era of financial infrastructure… happen elsewhere”.

$SOL ETF Flows Show Strength

While the Senate deliberates, institutional allocators continue to solidify their $SOL exposure. Against the flow of volatility, $SOL ETFs have succeeded in recording 12 straight weeks of inflows. 

Bitwise retains its firm lead on the $SOL ETF market, boasting $993M in AUM and representing over 68% of total net assets. Over $1.46B is now held in $SOL ETFs, constituting roughly 2.38% of the asset’s current market cap.

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