Bitcoin BTC$66,453.48 gave back a large portion of its recent gains on Thursday, now trading at $66,700 having lost 2.4% of its value since midnight UTC.

Ether (ETH) performed even worse, tumbling by 4.4% as the broader crypto market struggles to deal with continued risk-off sentiment.

The latest plunge was spurred by U.S. president Donald Trump, who said on Wednesday evening that the war in Iran would continue with extensive strikes on Iran.

“Over the next two to three weeks, we’re going to bring them back to the stone ages where they belong,” he said.

The comments led to an immediate spike in oil prices, with brent crude rising by around 10% to $108 per barrel as U.S. equities diverged.

Nasdaq 100 and S&P 500 futures lost 1.5% and 1.1% respectively while the U.S. dollar increased by 0.5% to above 100 points.

Derivatives positioning

• BTC’s price has dropped over 2% since midnight UTC hours alongside a slightly uptick in open interest in major USD- and USDT-denominated futures. Plus, perpetual funding rates have dropped to their most negative since March 12. This combination suggests that traders are bearish and shorting the falling market.
• In ether’s case, funding rates are most negative since October last year, a sign of strong bias for bearish bets. Meanwhile, bearishness in solana (SOL) is surprisingly more measured despite the overnight hack.
• Privacy-focused zcash (ZEC) and ADA$0.2378 have seen a notable decline in open interest (OI) in 24 hours, a sign of capital outflows.
• Nearly $400 million in futures positions have been liquidated due to margin shortfalls. That’s a 17% increase in losses compared to the previous day.
• Despite renewed risk-off tone, bitcoin and ether’s 30-day implied volatility indices remain flat in recent ranges. It points to orderly selling in the spot market rather than panic.
• There is little scope for panic because traders are already positioned for market swoon. They have been consistently chasing bitcoin and ether put options (downside hedges) since the start of the year. As of writing, bitcoin and ether puts remained pricier than calls across all tenors on Deribit.
• Block flows featured demand for ether straddles, a volatility strategy, and put spreads and bitcoin call spreads.

Token talk

• The worst performing benchmark on Thursday was CoinDesk’s DeFi Select Index (DFX), which lost 5.9% since midnight UTC, closely followed by the CoinDesk Computing Select Index (CPUS) that tumbled by 5%.
• Ethena (ENA) led the downside move as it fell by more than 10% on Thursday, there was also a heavy drawdown among DeFi tokens UNI, LDO, SKY and AAVE – all shedding between 4.2% and 6.5% during Asian and European hours on Thursday.
• Algorand (ALGO) bucked the bearish market trend, rising by around 0.8% on Thursday as it continues its rich vein of form having rallied by 22% in the past week.
• CoinMarketCap’s “altcoin season” index is down from 50/100 to 42/100 since March 30, highlighting relative weakness across the sector.

Coinbase chief legal officer Paul Grewal said the US Digital Asset Market Clarity Act is “moving toward” a markup hearing in the US Senate Banking Committee and could eventually move to a floor vote if senators resolve the stablecoin yield dispute and schedule a markup.

Speaking in a Wednesday interview on Fox Business, Grewal said lawmakers are nearing agreement on core elements of the crypto market structure bill, even as debate continues over stablecoin yield. “I think we’re very close to a deal,” he said.

The remarks point to possible movement on one of the last major sticking points in Senate talks over crypto market structure legislation: whether stablecoin issuers or platforms should be allowed to offer yield or similar rewards. The dispute has helped delay a Senate Banking Committee markup, leaving the broader effort to set federal rules for digital asset oversight still unresolved.

US banks have pushed for restrictions, arguing that such incentives could draw deposits away from traditional institutions and disrupt the banking system. Grewal pushed back on that claim, saying there is no evidence to support fears of deposit flight.

The US House of Representatives passed the CLARITY Act on July 17, 2025. In January, Senate Banking Committee Chair Tim Scott delayed a planned markup, which has yet to be rescheduled.

Related: Crypto investor sentiment will rise once CLARITY Act is passed: Bessent

Trump blames banks for stalling crypto bill

Last month, US President Donald Trump accused banks of undermining efforts to pass crypto market structure legislation, saying they are blocking progress over disagreements on stablecoin yield payments. “The Banks should not be trying to undercut The Genius Act, or hold The Clarity Act hostage,” he wrote.

It was later reported that Trump met privately with Coinbase CEO Brian Armstrong just hours before issuing the statement.

In January, Armstrong said Coinbase could not back the market structure bill “as written,” pointing to draft amendments that would eliminate stablecoin rewards and let banks restrict competition.

Related: CLARITY Act 2026 odds ‘extremely low’ if not passed before April: Exec

CLARITY delay could expose crypto to crackdowns

Last week, Coin Center executive director Peter Van Valkenburgh warned that failure to pass the CLARITY Act could leave the crypto industry vulnerable to a future US administration taking a tougher stance. He argued that rejecting developer protections in favor of short-term business interests risks creating a system shaped by political shifts rather than clear law.

“The point of passing CLARITY is not to trust this administration. It is to bind the next one,” he said.

Magazine: Bitcoin may take 7 years to upgrade to post-quantum — BIP-360 co-author