Bitcoin traded near the $66,000 mark on Tuesday, as investors balanced optimism surrounding U.S. cryptocurrency legislation against mounting geopolitical tensions in the Middle East. Broader digital assets also lost momentum after a recent rebound, reflecting cautious market sentiment.
Attention remained fixed on developments in Washington, where lawmakers continue to debate the Digital Asset Market Clarity Act. According to CoinDesk, Senate Democrats have raised concerns over key provisions of the proposed market structure legislation, particularly rules that would prohibit senior government officials from holding significant cryptocurrency interests.
The primary disagreement centers on enforcement authority. Democrats are pushing for state attorneys general to oversee compliance with the ethics provisions, while the White House and Republican sponsors favor granting enforcement powers exclusively to the U.S. attorney general.
The ethics clause, which would apply to the U.S. president, vice president and members of Congress, has emerged as the main hurdle to advancing the legislation. While resolving the enforcement dispute could help move the bill forward, negotiators are still working through other issues, including how software developers would be treated under anti-money laundering and illicit finance provisions.
Meanwhile, geopolitical uncertainty continued to pressure risk assets. Bitcoin’s recent recovery lost steam as the United States and Iran exchanged strikes for an 11th consecutive day, with neither side showing signs of de-escalation.
Washington reiterated warnings of potential military action targeting Iran’s nuclear facilities, while Tehran cautioned that any such move would significantly escalate the conflict. The situation has also disrupted global shipping routes after Yemen’s Iran-backed Houthi movement imposed a naval blockade in the Red Sea.
The resulting surge in oil prices has renewed concerns over persistent energy-driven inflation, raising the possibility that the U.S. Federal Reserve could maintain tighter monetary policy or even consider additional interest rate increases. Higher borrowing costs typically reduce demand for speculative investments, including cryptocurrencies.
Across the broader digital asset market, major altcoins also retreated. Ether slipped 0.9% to $1,917.05, while XRP eased 0.2% to $1.1321. Solana and Cardano declined 1.8% and 3.1%, respectively, while BNB fell 1.5%.
Among meme-based cryptocurrencies, Dogecoin dropped 1%, while $TRUMP edged 0.7% lower as traders adopted a more cautious stance amid ongoing macroeconomic and geopolitical uncertainty.
