By Adam Clark

Bitcoin and most other cryptocurrencies were dropping on Tuesday. The crypto rally looks to be pausing as the market digests the implications of U.S. legislation relating to digital currencies.

Bitcoin's price was down 0.9% over the past 24 hours early on Tuesday, at around $118,233. The world's largest cryptocurrency hit a record high of $123,166 last week amid excitement over "Crypto Week" as multiple pieces of crypto-related legislation made their way through Congress.

Several large altcoins were falling. Ether fell 2.2%, XRP dropped 2.1% and memecoin Dogecoin was down 2.1%. However, Solana was rising 5.1%.

"The crypto market capitalization has declined by 1.4% over the past 24 hours to $3.9 trillion. At the end of Monday, pressure on Bitcoin spread to the market, halting growth in several altcoins," wrote Alex Kuptsikevich, chief market analyst at FxPro, in a research note.

President Donald Trump signed the Genius Act into law last Friday, establishing a framework for federal regulation of so-called stablecoins, whose prices are pegged to a real currency like the dollar. The law bans yield-bearing stablecoins, which has led traders to look toward Ether and helped the second-largest cryptocurrency more than double in the past three months.

"Expectations for diminished stablecoin yields are driving interest toward Ethereum as the primary alternative for yield generation in decentralized finance," wrote Deutsche Bank analyst Marion Laboure in a research note.

Attention now turns to the Clarity Act, which addresses the question of whether cryptos are commodities or securities, and what regulator would oversee them, which still needs to pass the Senate. Publicly traded companies continue to expand their crypto holdings ahead of the potential approval of the Clarity Act.

Trump Media and Technology Group announced Monday that it had accumulated roughly $2 billion in Bitcoin and related securities. Blank-check company Dynamix said the same day that it is merging with another entity to create a new company known as the Ether Machine, with plans to manage over $1.5 billion in Ether.

Write to Adam Clark at adam.clark@barrons.com

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July 22, 2025 05:33 ET (09:33 GMT)

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