Bitcoin falls below $63,000! The advancement of the U.S. cryptocurrency regulatory bill is stalled, and the performance of Coinbase (COIN.US) and Strategy (MSTR.US) is under pressure, impacting market sentiment.

Bitcoin fell below $63,000 on Friday, marking a new low for about two weeks. As the progress of U.S. cryptocurrency regulatory legislation slows down, coupled with disappointing recent performance from Coinbase (COIN.US) and Strategy (MSTR.US), market risk appetite further cooled, prompting investors to retreat from high-risk assets such as cryptocurrencies. As of the time of writing, Bitcoin had dropped by 3.6% at one point to $62,405, its lowest level in about two weeks, with a cumulative decline of approximately 30% this year. Meanwhile, other cryptocurrencies with smaller market capitalizations and relatively low liquidity were also generally down. Joshua Lim, co-head of global markets at FalconX, noted that the cryptocurrency market has struggled to maintain upward momentum recently, with funds using each rally to reduce their positions as market expectations for the "Clarity Act" continue to dim. In addition, the implied volatility of Bitcoin options remains near historical lows, with a significant amount of funds employing covered call strategies continuing to suppress price fluctuations, causing Bitcoin to maintain a range-bound trading pattern. Market participants pointed out that this round of declines coincides with one of the most anticipated policy catalysts in the cryptocurrency industry, the stalled progress of the "Clarity Act." Since the bill failed to advance smoothly to Senate review before the U.S. Congress's summer recess, market expectations for the timely establishment of a U.S. cryptocurrency regulatory framework have significantly cooled, weakening bullish sentiment. At the same time, the performance of cryptocurrency-related publicly traded companies further undermined market confidence. The quarterly results from Coinbase, the largest cryptocurrency exchange in the U.S., showed sustained weakness in retail trading demand; while Strategy, the publicly traded company with the largest amount of Bitcoin holdings globally, recorded an impairment loss of $8.22 billion on its Bitcoin assets due to the drop in Bitcoin prices and reported a substantial quarterly loss. Analysts believe that Bitcoin's current pullback is occurring against the backdrop of overall risk assets facing pressure. Recently, the volatility of popular artificial intelligence (AI) stocks on Wall Street has significantly intensified, and the overall risk appetite in the U.S. stock market has declined, leading short-term investors pursuing high-risk assets to become more cautious. Shiliang Tang, managing partner of Monarq Asset Management, stated that due to multiple factors including Coinbase's disappointing performance, weakened momentum for the "Clarity Act" before the August congressional recess, and the sustained rise in long-term U.S. Treasury yields following the Federal Reserve's meeting, the market has overall shifted to a "risk-averse" mode, with investors generally opting to reduce their risk exposure before the weekend.