LIVE: Why is Bitcoin crashing?

Bitcoin led a wider crypto selloff on Tuesday after the U.S. Senate failed to move the CLARITY Act forward, taking away one of the biggest near-term policy developments the industry had been watching while markets were already getting nervous about higher interest rates.

Bitcoin fell as much as 5% to $76,110, extending losses that had started before the Senate vote. Ether dropped more than 8.3% at one point, while some smaller cryptocurrencies fell even harder. For both Bitcoin and Ether, it was their biggest decline since June.

The procedural vote on the CLARITY Act ended with 49 senators in favor and 50 against. The bill needed 60 votes to advance, leaving it 11 votes short and putting efforts to pass U.S. crypto market structure legislation this year in serious doubt.

That happened even after both sides had made major compromises. U.S. President Donald Trump agreed over the weekend to ethics rules he had previously resisted.

Those provisions would require federal officials and their spouses to either sell significant financial stakes in crypto issuers or move those holdings into a blind trust. State attorneys general would also have a role in enforcing the restrictions.

According to Republican negotiators, the end product of the bill contained more than 120 demands from the Democrats.

The bill was more than 600 pages long, indicating just how much negotiating had already taken place before the vote in the Senate failed.

Outside crypto, U.S. stock futures were slightly higher early Wednesday as investors waited for the Federal Reserve’s interest rate decision. S&P 500 futures rose 0.22%, Nasdaq-100 futures gained 0.3%, and Dow futures added 113 points, or 0.2%.

Markets are heavily expecting another rate increase. Futures were pricing in a 92% chance of a quarter-point hike Wednesday, while the odds of another quarter-point increase stood at 45% for October and 30% for December. The Fed’s current target range is 3.5% to 3.75%.

Asian stocks were mixed. Japan’s Nikkei 225 fell 0.34%, while the Topix rose 0.7%. Kospi of South Korea climbed by 0.12% while Kosdaq of South Korea fell by 1.05%.

S&P/ASX 200 of Australia gained 0.24%. Hang Seng of Hong Kong dropped by 0.18%, whereas China’s CSI 300 fell by 0.42%.

Oil was also adding to inflation concerns. West Texas Intermediate jumped 4.4% to $105.83 a barrel, its highest closing level since May 19, after Saudi Arabia reportedly cancelled some shipments following drone attacks on a major export pipeline. Brent crude rose 2.9% to $108.75.

Treasury yields have climbed alongside expectations that prices could stay high. The 10-year Treasury yield was slightly above 5%, while the 30-year yield reached 5.369%.