Crypto Market on Edge as White House Threatens Withdrawal of CLARITY Act Support

The crypto market is experiencing significant anxiety as Bitcoin and many altcoins face a downturn due to the potential withdrawal of White House support for the pivotal CLARITY Act.

Key Takeaways

The crypto market has seen a decline, with Bitcoin and Ethereum both experiencing price drops.
The White House is contemplating withdrawing support for the Market Structure Bill, following Coinbase’s withdrawal of support.
The administration is urging discussions to align interests between the crypto and banking sectors.
Despite setbacks, analysts maintain a cautiously optimistic outlook regarding the eventual passage of the bill.

Crypto market on edge as White House threatens to withdraw CLARITY Act support - 1

Market Decline Linked to CLARITY Act Uncertainty

On Saturday, Bitcoin slipped down to $3,293, and Ethereum fell to $3,285, contributing to a total market capitalization of $3.2 trillion. Moreover, the 24-hour trading volume decreased by 25%, amounting to $90 billion. This decline is largely attributed to the White House's threat to step back from backing the Market Structure Bill, which is currently stalled in the Senate. The Trump administration expressed anger towards Coinbase for withdrawing its support, likening it to a 'rug pull' against both the White House and the crypto sector.

🚨SCOOP: The White House is considering pulling its support for the crypto market structure bill entirely if @coinbase does not return to the negotiation table with a yield agreement that satisfies the banks and leads to an overall deal, a source close to the Trump administration reveals. … — Eleanor Terrett (@EleanorTerrett) January 17, 2026

Furthermore, the administration emphasized that no single company can represent the entire crypto industry and is pushing for more dialogue to reach a consensus that benefits both the crypto sector and banking institutions.

Coinbase has argued that the proposed bill could hinder the rapidly growing stablecoin industry, which has amassed over $308 billion in assets by eliminating crypto exchanges' ability to offer interest. Banks and credit unions have voiced concerns that this limitation might force customers to withdraw funds in favor of stablecoins, ultimately harming the economy by reducing the amount of capital available for lending to businesses.

While Coinbase may have retracted its support, various leading companies in the crypto sphere continue to back the bill. Robinhood claims that the legislation would offer regulatory clarity for the crypto industry and facilitate staking solutions for its customers. Other supporters include Kraken, Ripple Labs, and Galaxy.

Growing Optimism Among Traders and Analysts

Despite the uncertainties, many analysts and traders remain hopeful about the eventual passage of the bill, interpreting the current delay as part of a strategic negotiation process. A recent Polymarket poll, with an asset base of $17,930, estimates a 55% chance of the bill passing, up from a low of 40% earlier this month. A Kalshi poll suggests a 52% likelihood of the bill becoming law before 2027.

While delays in the crypto bill are part of ongoing discussions, I’m confident a resolution will be achieved soon. In the past 24 hours, I’ve spoken to over ten senators from both parties, and I believe they are all working earnestly to finalize an agreement. It always gets… — Mike Novogratz (@novogratz) January 14, 2026

The CLARITY Act represents a crucial piece of cryptocurrency legislation in the United States since the passage of the GENIUS Act in 2025. While GENIUS centered on regulations concerning stablecoins, the CLARITY Act aims to delineate the responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).