Bitcoin and the broader crypto complex staged a rebound on Tuesday as optimism around proposed US legislation helped lift risk sentiment, while some analysts argued that cooling momentum in AI-linked equities could redirect investor attention toward digital assets.

Price action reflected that shift: Bitcoin briefly traded above $67,000, and Ether neared $1,950. Crypto-related stocks also surged, with Coinbase shares up about 12%, American Bitcoin rising roughly 14%, and Cipher Digital gaining around 17%.

Key takeaways

• Regulatory clarity expectations in the US boosted crypto sentiment, with Treasury Secretary Scott Bessent signaling lawmakers are close to action on the CLARITY Act.
• Bitcoin outperformed in the same session crypto equities rallied, suggesting the move was broad rather than isolated to spot trading.
• Analysts cited a potential rotation away from AI-linked equities as AI trade momentum cools.
• The Philadelphia Semiconductor Index’s pullback may be a signal that AI infrastructure enthusiasm is losing traction.

US legislative momentum lifts crypto risk appetite

The immediate catalyst for Tuesday’s turnaround was renewed confidence that US lawmakers could move forward on a long-debated framework for digital-asset regulation.

According to Bloomberg, US Treasury Secretary Scott Bessent said lawmakers were at the “1-yard line” regarding the CLARITY Act, a proposal intended to define the regulatory roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) across digital assets.

That kind of legislative direction matters to crypto markets because it can reduce uncertainty about how tokens are classified, which agencies have oversight, and what rules exchanges and custodians must follow. In the near term, even statements that suggest progress can improve investor confidence and translate into higher demand for crypto exposure—whether through spot or through equities that track the sector.

The stock reaction was pronounced. Coinbase’s reported jump of around 12% and similar gains in other crypto-linked companies indicated the market was responding to more than just token price moves; equities tied to the industry often react quickly to perceived regulatory and market-structure developments.

Rotation thesis: AI trade cooling could free up capital

Beyond regulation, some market commentators pointed to cross-asset rotation. As traders reassess the crowded “AI trade,” they may look for alternatives that previously attracted less speculative appetite.

FRNT Financial CEO Stephane Ouellette, speaking to Bloomberg, argued that with Bitcoin trading toward the top end of its recent range, the “path of least resistance” could be higher. He also suggested an “elevated likelihood” of a breakout as the AI trade slows and investors become more comfortable with the broader environment for interest rates.

This matters because the last year has seen AI narratives pull capital into specific equity segments, particularly chipmakers and AI infrastructure. If that momentum fades—whether due to valuation concerns, earnings expectations, or spending risk—capital can reallocate toward areas that offer a different risk/return profile, including crypto.

Semiconductors’ pullback signals AI momentum is weakening

The clearest supporting data for the rotation argument comes from the Philadelphia Semiconductor Index (SOX), described as a widely watched benchmark for chipmakers tied to the AI boom. According to the article, the SOX index surged roughly 110% over the past year, reflecting strong investor enthusiasm for AI-driven demand.

However, the same report highlighted that the rally has begun to stall. It notes that last week the SOX entered a technical bear market after dropping more than 20% from its recent high. Investors, it said, have grown more concerned about high valuations and the risk of overcapacity in AI infrastructure spending.

That development is important for crypto investors because AI-linked equity weakness can change market perception of speculative growth. When expectations around AI spending cool, speculative flows can loosen—making it easier for other themes, including digital assets, to attract new buyers.

It also reframes Tuesday’s move: rather than treating crypto strength as purely idiosyncratic, the market appears to be reacting to a broader shift in speculative leadership—from AI back toward regulated or macro-sensitive narratives like US policy progress.

What to watch next

Traders will likely watch whether CLARITY Act momentum translates into concrete legislative steps rather than rhetorical optimism, and whether AI-related equity weakness persists. If the semiconductor selloff continues and regulation expectations become more tangible, crypto may find follow-through beyond a single-session rebound—otherwise Tuesday’s rally could prove harder to sustain.

Bitcoin and the broader cryptocurrency market looked poised for a recovery on Tuesday as progress on landmark US crypto legislation boosted sentiment, with analysts also pointing to a slowdown in the AI trade as a potential catalyst for capital rotating back into digital assets.

Bitcoin (BTC) briefly climbed above $67,000 and Ether (ETH) neared $1,950, while crypto-related stocks rallied sharply. Coinbase shares rose 12%, American Bitcoin gained 14% and Cipher Digital jumped 17%.

The gains came after US Treasury Secretary Scott Bessent said lawmakers were at the “1-yard line” on the long-debated CLARITY Act, which would define the regulatory roles of the Securities and Exchange Commission and Commodity Futures Trading Commission over digital assets.

Coinbase (COIN) was among the market’s top-performing stocks on Tuesday. Source: Yahoo Finance

Beyond the regulatory tailwinds, some analysts said crypto could also benefit from investors shifting capital away from AI-linked equities.

“With Bitcoin at the top end of the range, we see the path of least resistance being higher and an elevated likelihood of a breakout of the range as the AI trade slows and the market becomes more comfortable with the path of interest rates,” FRNT Financial CEO Stephane Ouellette told Bloomberg. 

Related: Hut 8, IREN deals lift AI-focused Bitcoin mining stocks

AI trade loses momentum as chipmakers fall

AI-related stocks have dominated speculative markets over the past year, with the Philadelphia Semiconductor Index (SOX) — a widely watched benchmark for chipmakers powering the AI boom — surging roughly 110%.

However, the rally has begun to lose momentum. Last week, the SOX index entered a technical bear market after falling more than 20% from its recent high, as investors grew increasingly concerned about lofty valuations and the risk of overcapacity in AI infrastructure spending.

This follows an extended period in which AI largely overshadowed digital assets. Since the launch of ChatGPT in late 2022, a wave of innovation, venture capital investment and retail enthusiasm has shifted much of the market’s speculative appetite toward AI.

Source: Milk Road

Related: Will the US get CLARITY this week? Bitcoin’s new $80K target: Hodler’s Digest, July 19

Senate negotiations over the CLARITY Act have produced new customer safeguards and an ethics agreement, raising Polymarket’s odds of enactment this year to 43% as lawmakers pursue a bipartisan floor vote.

CNBC reported that Democratic senators secured additional customer protection measures during negotiations over the Digital Asset Market Clarity Act, although unresolved details have continued to delay the release of the Senate’s final text.

Speaking to CNBC on Monday, Coinbase Vice Chair Ryan VanGrack described the revised protections as giving the bill “more teeth.” According to VanGrack, the changes address gaps in the current rules governing digital asset users, but he did not explain what requirements lawmakers had added.

Senate Majority Leader John Thune has also voiced cautious confidence that Republicans and Democrats can reach an agreement. In comments shared through an X post, Thune said there was a “good chance” of a deal, while warning that the talks could still take a different course.

Lawmakers are working with Democratic senators to secure enough support to bring the legislation to the floor, according to Thune. The majority leader has previously indicated that he wants a bipartisan agreement before committing valuable Senate floor time to the bill.

Republicans control 53 Senate seats but would need support from at least seven Democrats to reach the 60 votes generally required to overcome a filibuster. That arithmetic has given Democratic negotiators considerable influence over the customer protection and ethics sections of the legislation.

Bipartisan support has moved closer

An agreement covering elected officials’ involvement in digital assets has removed one of the main obstacles in the negotiations, crypto.news reported. Democratic lawmakers had pressed for rules addressing potential conflicts connected to President Donald Trump’s crypto interests and the participation of public officials in the sector.

According to Punchbowl News, Trump accepted the inclusion of ethics provisions, helping negotiations advance after weeks of disagreement. The report did not publish the full language, and the final restrictions will remain unclear until senators release the updated bill.

Senator Kevin Cramer offered further details about the enforcement structure, stating that negotiators had reached an agreement on the ethics language. Under the approach described by Cramer, the Justice Department would enforce the provision instead of leaving enforcement to individual state attorneys general.

Cramer argued that the bill was becoming clearer as lawmakers resolved each disputed issue. Commenting on the progress, the North Dakota Republican said, “I think we’re almost there.”

At the same time, Treasury Secretary Scott Bessent urged Congress to complete the legislation before senators leave Washington for their August recess. Bessent described lawmakers as being at the “1-yard line,” indicating that only a limited number of disputes remained in the negotiations.

Coinbase has presented the customer protection concessions as evidence that Democratic participation has changed the legislation rather than simply supplying Republican sponsors with the votes they need. VanGrack told CNBC that Democrats had used the process to strengthen protections for people who hold or trade digital assets.

Earlier Senate work has already included rules governing customer property, fair and transparent pricing, advertising standards and fraudulent conduct. A draft published by the Senate Agriculture Committee also requires digital commodity brokers, dealers and exchanges to register with the Commodity Futures Trading Commission, subject to exemptions written into the proposal.

The Senate Agriculture Committee advanced its portion of the market structure package in January. Committee Chair John Boozman stated at the time that the legislation built on the bipartisan, House-passed CLARITY Act and included provisions negotiated with Senate Democrats.

Final text still controls the timeline

Despite the latest agreements, CNBC reported that the Senate has not released the completed legislative text. Ethics rules remain part of the delay, leaving lawmakers, crypto companies and consumer groups unable to assess the precise restrictions or enforcement powers under discussion.

Thune has said he hopes to bring the CLARITY Act to the Senate floor before August, but his comments indicate that scheduling depends on Democrats committing enough votes. A floor vote without that support could stall the bill before the chamber considers amendments or final passage.

The House has already approved its version of the CLARITY Act, while the Senate is preparing its own text. Any differences between the two chambers would have to be resolved before Congress could send a common version to Trump for his signature.

The legislation seeks to establish federal rules for digital asset markets and clarify the roles of the Securities and Exchange Commission and the CFTC. Senate Agriculture Committee materials show that its portion would give the CFTC authority over digital commodity intermediaries and impose registration, custody, anti-fraud, and customer property requirements.

Traders on Polymarket currently assign a 43% probability that Trump will sign the CLARITY Act into law during 2026, down from the 47% figure cited earlier in the negotiations. Prediction-market odds can change quickly and do not establish whether Congress will meet Thune’s preferred timetable.

For now, the ethics agreement and Democratic customer protections have improved the path to a bipartisan vote, but the unpublished text and Senate calendar continue to determine whether the bill can reach the floor before the August recess.

Bitcoin and the wider crypto market started Tuesday on a firmer footing as expectations for US regulatory progress reignited risk appetite, lifting both digital assets and shares tied to crypto activity.

Bitcoin briefly pushed above $67,000 and Ether neared $1,950, while crypto-related equities rose sharply. Coinbase stock climbed about 12%, American Bitcoin gained roughly 14%, and Cipher Digital jumped around 17%.

Key takeaways

• Shares and tokens rallied after US Treasury Secretary Scott Bessent said lawmakers are approaching a key vote on the CLARITY Act.
• The proposed law would clarify which regulator—SEC or CFTC—oversees different categories of digital assets.
• Analysts also cited weakening momentum in AI-linked equities as a potential driver of capital rotation back into crypto.
• The Philadelphia Semiconductor Index’s pullback suggests speculation in AI infrastructure may be cooling after a strong run.

Regulatory optimism lifts the whole complex

The immediate catalyst for Tuesday’s rebound came from remarks by Scott Bessent, reported by Bloomberg, indicating that lawmakers were at the “1-yard line” on the long-debated CLARITY Act. The bill aims to define the regulatory roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for digital assets.

For investors, that kind of clarity matters because it can reduce uncertainty around enforcement risk and the classification of tokens and trading venues. It also has second-order effects: when regulators’ boundaries look more clearly drawn, capital formation—whether in exchanges, custody, or institutional products—tends to improve as participants better price compliance and operational costs.

Crypto’s rebound runs alongside stock strength

Market-wide optimism showed up most visibly in equities connected to the crypto ecosystem. Coinbase’s stock led gains among major crypto market proxies, while companies exposed to mining, trading, or related infrastructure also outperformed.

That strong correlation between crypto prices and crypto-linked equities often reflects a common driver: when policy expectations shift, both asset holders and equity investors adjust their assumptions about future regulation, adoption, and market structure.

Rotation risk: why AI-linked stocks may be losing steam

Beyond US legislative headlines, some analysts pointed to a separate potential driver—investors dialing back exposure to AI-linked equities—which could free up liquidity for other high-beta trades, including digital assets.

Bloomberg quoted FRNT Financial CEO Stephane Ouellette arguing that when Bitcoin is near the upper end of its range, the “path of least resistance” can turn upward. Ouellette also said the likelihood of a breakout may increase if the AI trade slows and investors become more comfortable with the broader interest-rate outlook.

The “AI trade” explanation has a concrete benchmark behind it. According to coverage cited by the article, the Philadelphia Semiconductor Index (SOX)—a widely watched measure for chipmakers tied to AI demand—surged roughly 110% over the past year. But momentum has started to slip: the SOX entered a technical bear market last week after falling more than 20% from its recent high, with investors reportedly increasingly worried about lofty valuations and the risk of overcapacity in AI infrastructure spending.

That matters because much of the speculative appetite in financial markets has been concentrated in AI during the last year. Since the public launch of ChatGPT in late 2022, the mix of rapid innovation, venture capital activity, and retail enthusiasm helped shift attention away from crypto and toward AI narratives across trading desks and risk budgets.

What to watch next

Tuesday’s bounce looks tied to two threads: near-term expectations for the CLARITY Act’s progress in Washington and signs that AI-linked equity momentum may be cooling. The next signal for traders and longer-term investors will be whether crypto price strength holds through subsequent US legislative developments—and whether the broader market continues to rotate attention from semiconductors back toward risk assets like digital currencies.

“If Senate Democrats block this historic legislation after the administration has bent over backward to accommodate their concerns, stakeholders should make no mistake: It is the Democrats who are blocking this legislation because they were never serious about a legislative outcome,” the White House official said.

Democratic negotiators such as Senators Kirsten Gillibrand, Ruben Gallego and Angela Alsobrooks reportedly haven’t received details of the agreement with Trump, who’d met personally with Republican senators last week. But many of the Democrats have drawn a line in the sand that the ethics provision — driven primarily by Trump’s own deep crypto connections — needs to be strong.

The dispute was heightened recently by the president’s disclosures that he’d pocketed more than $1 billion last year from his crypto interests.

The White House, Republicans and their crypto industry allies are already building their case against any Democrats who don’t accept the new answer to their ethics demands. It’s unclear when they’ll get to see it.

The industry is expecting full circulation of the Clarity Act legislative language as soon as Tuesday night or Wednesday, though that expectation has been repeatedly delayed since last week.

The Senate has fewer than three weeks to finish the bill, including the ethics piece, and get it through the political gauntlet of a floor vote before lawmakers leave town for their reelection campaigns. There’s technically enough time, but even without significant further debate, it would be tight.

XRP Ledger’s v3.2.0 now runs on 66% of tracked validators as the network approaches a scheduled amendment activation. XRP Ledger’s v3.2.0 has reached 99 validators and 481 nodes across the monitored network. The July 29 activation remains on schedule because validator support continues above the required threshold.

Validator Adoption Expands Across The Network

XRP Ledger’s v3.2.0 currently operates on 57.33% of tracked nodes, according to recent XRPL Explorer data. The tracker recorded 481 updated nodes among 825 observed systems. Adoption has increased since the software became available in June.

However, many operators still use the earlier release across both validator and node infrastructure. Version 3.1.3 remains active on 42 validators, representing 28% of the monitored validator group. Another 323 nodes continue running that version, equal to 38.41% of tracked nodes.

XRP Ledger’s v3.2.0 gives operators access to maintenance fixes before the amendment changes ledger rules. Software installation and amendment approval remain separate processes under XRP Ledger governance. Updated servers receive the code, while validator votes determine whether consensus changes become binding.

Amendment Support Clears The Required Threshold

The fixCleanup3_2_0 amendment currently holds 85.71% validator support ahead of its planned activation. Thirty validators support the proposal, while five validators oppose it. The approval level exceeds the network’s required 80% threshold.

XRP Ledger’s v3.2.0 supports the amendment, but approval must remain above 80% during the full waiting period. XRP Ledger rules require that level for two consecutive weeks. A decline below the threshold would restart the countdown.

The network has scheduled activation for July 29, 2026, at 09:57 UTC. XRP Ledger’s v3.2.0 must remain available across participating infrastructure when the new rules take effect. Unsupported servers may become amendment-blocked and lose the ability to confirm the ledger’s valid state.

Update Addresses Existing Protocol Issues

XRP Ledger’s v3.2.0 fixes problems affecting vaults, lending functions, permissioned trading, and related domain features. The release addresses calculations involving Single Asset Vault deposits and issued shares. It also corrects accounting behavior within the Lending Protocol.

The update includes repairs for the Permissioned DEX, Multi-Purpose Tokens, and Permissioned Domains. XRP Ledger’s v3.2.0 applies maintenance changes to features already introduced through earlier amendments. The package does not center on new consumer-facing products.

The development team also renamed the main server software from rippled to xrpld. XRP Ledger’s v3.2.0 retires amendments that have remained active for more than two years. Developers also continued dividing libxrpl into smaller modules for simpler maintenance and future development.

XRP Ledger’s v3.2.0 remains on course for the July 29 amendment activation after reaching 66% validator adoption. Validator support remains above the required level, while operators using older software still face an update deadline.