The Coinbase stock is down today amid the decline in the crypto market, with Bitcoin dropping below the psychological $70,000 level. The crypto stock is also down following the latest draft of the CLARITY Act, which largely restricts crypto firms such as Coinbase from paying stablecoin rewards.
Coinbase Stock Falls As Market Faces Renewed Pressure
The COIN stock is down over 8% today, dropping from an intraday high above $200 to around $183, according to TradingView data. This stock is now down over 20% year-to-date (YTD) as crypto-linked assets face renewed pressure amid the U.S.-Iran war and uncertainty over any peace talks between the two countries.
Bitcoin notably dropped below $70,000 today as hopes faded over any peace talks with the U.S. and Israel carrying out fresh strikes on Iran’s energy facilities. BTC’s decline has dragged the Coinbase stock and other crypto assets down.
The COIN stock is also facing pressure from rising oil prices, which threaten to drive inflation higher and prompt the Fed to hold off on cutting rates or even to hike them to curb inflation. This could restrict the amount of liquidity flowing into risk assets like COIN stock.
Market Reacts To ‘Restrictive’ Language In CLARITY Act
The Coinbase stock is also down today following the latest development with the CLARITY Act. As CoinGape reported, the stablecoin yield language in the crypto bill is largely restrictive and places a broad ban on crypto firms like Coinbase paying stablecoin rewards.
The crypto exchange notably generates significant revenue from USDC through its partnership with Circle. This revenue largely depends on the amount of stablecoin balances on the exchange, so restricting the payment of rewards on stablecoin balances could discourage users from holding USDC on the platform.
It is worth noting that Coinbase’s CEO, Brian Armstrong, opposed the ban on stablecoin rewards in an earlier draft of the CLARITY Act that the Senate Banking Committee released prior to a markup that was meant to take place in January earlier this year. However, the crypto CEO has yet to publicly comment on this latest draft.
Market expert Maestro noted that Coinbase stock faces downside risk due to pressure from the CLARITY Act on the exchange’s revenue model. This came as the analyst noted that the latest draft text appears restrictive enough to slow the adoption of stablecoins as a real alternative to bank deposits.