Bitcoin ETFs Lose $450M After Clarity Act Fails in Senate

U.S. spot Bitcoin ETFs recorded $450 million in net outflows on Tuesday, their largest single-day withdrawal since June 25, as the Senate’s failure to advance the Digital Asset Market Clarity Act triggered a sharp decline across tokens with greater exposure to U.S. regulation.

According to SoSoValue, the $450 million outflow marked the heaviest daily withdrawal from spot Bitcoin ETFs since June. The Senate vote fell roughly 10 votes short of the 60 needed to move the legislation forward, with seven Democrats who had participated in months of negotiations among those voting against the motion.

Bitcoin was little changed from midnight UTC after initially falling in the aftermath of the vote. The cryptocurrency was trading around $75,575.59, with its 24-hour decline of 1.7% relatively modest compared with losses across several major altcoins.

The CoinDesk 20 Index was also broadly stable overnight, slipping less than 0.1% since midnight UTC after tumbling 4.6% on Tuesday. That was its sharpest one-day decline since June 5.

Markets are now turning their attention to the Federal Reserve, which is due to announce its interest-rate decision later Wednesday. Heading into the meeting, traders had generally viewed a rate increase as the base-case outcome.

The failure of the Clarity Act has also sharply reduced the prospects for market-structure legislation reaching the Senate this year. Congress is expected to operate under split control in January, adding another layer of uncertainty around the legislation’s future.

Regulatory-Sensitive Tokens Take Larger Hit

Bitcoin’s relatively limited decline stands in contrast to several tokens more directly exposed to U.S. regulatory treatment.

Stellar’s XLM fell 9.6% over 24 hours, while XRP declined 8.1%. Across the CoinDesk 100, 95 assets recorded losses during the same period.

Traditional financial markets were considerably calmer. Nasdaq 100 futures gained 0.33%, gold advanced 0.88% and silver rose 1.37%. The U.S. Dollar Index was essentially unchanged.

Derivatives Show Increased Deleveraging

The sell-off also triggered a significant wave of forced liquidations in crypto derivatives. More than $570 million worth of leveraged futures positions were liquidated over the 24-hour period, the largest amount since Aug. 22. However, the total remained below the much larger liquidation events recorded in early February and early June.

The taker long-short volume ratio also turned bearish. Short trades represented 51.5% of taker flow over 24 hours. Takers are traders who execute immediately against available offers or bids, consuming liquidity from the order book.

On Hyperliquid, the trader long-short ratio eased to 2.53 from 2.71. The earlier 2.71 reading was the highest since early October 2025, when bitcoin was trading above $120,000 at record levels. Despite the decline, longs still outnumber shorts by more than two to one, leaving substantial bullish leverage that could be vulnerable to additional liquidations if prices continue falling.

Bitcoin Futures Point to Bearish Positioning

Bitcoin fell 1.4% over 24 hours while futures open interest increased to 688,000 BTC from 676,000 BTC. Rising open interest alongside a falling price is commonly interpreted as evidence that traders are adding short positions.

Bitcoin’s 24-hour open-interest-adjusted cumulative volume delta, or CVD, is also negative. This indicates that more short trades are being executed at prevailing market prices rather than through passive limit orders.

Perpetual funding rates, however, continue to indicate that some traders remain optimistic.

XRP futures show a similar pattern. The token has fallen nearly 10% while open interest has edged higher. Even so, total XRP futures positioning remains well below its historical peak, suggesting overall exposure is still relatively light.

Altcoin Derivatives Remain Under Pressure

XRP and most other major tokens, including ETH, TRX, DOGE, XLM and SHIB, recorded negative 24-hour CVD readings. The data points to aggressive selling in derivatives markets and leaves the tokens exposed to further downside.

Funding rates are also signaling bearish conditions for ETH, XLM, TRX, SOL, BCH, ADA and LINK.

At the same time, implied volatility has remained contained. The 30-day bitcoin and ether implied volatility indexes, BVIV and EVIV, are still within their recent ranges and significantly below their year-to-date highs. That suggests traders are not positioning for an unusually large volatility spike around the Fed’s rate announcement.

Options positioning is somewhat more defensive. Bitcoin’s one-week and one-month options skews have moved higher and remain positive, indicating increasing demand for downside protection through puts. The one-week skew is around 5.76%, while the one-month measure is approximately 6.33%. Ether options skews show a similar pattern.

Options trading volume presents a different picture. Most of the heavily traded Bitcoin options over the past 24 hours were calls, with the $79,000 strike leading activity. For ether, however, all of the five most-traded options were puts.

Arbitrum and Other Tokens Diverge

Arbitrum (ARB) was one of the strongest performers over the past 24 hours, gaining 16%. The move followed Standard Chartered’s forecast that ARB could reach $10 by the end of 2030, roughly 70 times its current level. The bank cited potential revenue from Robinhood Chain and expanding tokenized-asset activity. Its near-term projection is considerably lower at $0.50 by the end of this year.

Synapse (SYN) also moved sharply higher, more than doubling to $0.1787 despite no obvious fundamental catalyst.

The structure of the move suggests derivatives activity played a major role. Synapse recorded $310.64 million in futures volume over 24 hours against a market capitalization of only $41.18 million. Open interest was equal to about 60% of the token’s market value, while Binance’s long-short account ratio stood at 0.93. Together, those figures point toward a short squeeze rather than a broad surge in spot buying.

Privacy-focused assets continued to attract interest. Zcash (ZEC) rose 6.9% to $1,186.75, leading the sector, while Dash (DASH) gained 2.9%.

Perpetuals exchange token Lighter (LIT) climbed 6% to $4.27, while Raydium (RAY) increased 5.4% to $1.30. Both recovered some of Tuesday’s losses but remained below their levels at the beginning of the week.

Several DeFi tokens moved lower after midnight UTC. AAVE, JUP and ETHFI each fell more than 2%.

The declines came despite comments from ether.fi founder Mike Silagadze before the Clarity Act vote. He had told CoinDesk that the U.S. represented a relatively small portion of ether.fi’s market and therefore argued that the legislation would have limited impact on the protocol.

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