Key Points:
- Bitcoin dropped 2.8% to $79,105.8 and ended its six-week winning streak.
- The U.S. Senate Banking Committee advanced the new Clarity Act in a 15-9 vote.
- Surging oil prices from the war in Iran pushed U.S. inflation expectations much higher.
- President Donald Trump finished his China visit with vague trade promises and new threats against Iran.
Bitcoin ended its six-week winning streak on Friday. The world’s top cryptocurrency took a hit as higher-than-expected U.S. inflation data and a lackluster meeting between President Donald Trump and Chinese leaders pushed investors away from risky assets. Traders sold off digital assets heading into the weekend. Bitcoin fell 2.8% to $79,105.8 by Friday evening, putting the digital coin on track for a nearly 2% weekly loss.
Other digital currencies followed Bitcoin downward across the board. Ether, the second-largest cryptocurrency, dropped 3.4% to $2,219.88, marking a 4.6% loss for the week. Solana fell 3.8%, and Cardano shed 4.5%. A few coins fought the broader weekly trend. XRP slipped 4.3% on Friday but still managed a 1% gain for the week. BNB lost 1.2% on the day but rose 3.6% over the past seven days. Memecoins also struggled heavily, with Dogecoin dropping 3.1% and the $TRUMP token sinking 6.8%.
Despite the falling prices, the crypto industry saw some positive momentum in Washington. The U.S. Senate Banking Committee voted 15-9 on Thursday to advance the Clarity Act. This bill creates a broad set of rules for the American crypto market. Crypto fans and industry executives have wanted this kind of legal framework for years to bring legitimacy to the space.
The legislation still faces a very tough road ahead. The bill must pass the Senate Agriculture Committee before the full Senate can even vote on it. Supporters will need to gather at least 60 votes to clear the Senate floor. The banking industry strongly opposes the bill because traditional banks want tighter limits on yield payments on stablecoins. Several labor unions and law enforcement groups also argue that the new rules could harm regular consumers and traditional financial companies.
Traders on the Polymarket platform currently give the Clarity Act a 68% chance of becoming law in 2026. Nexo Dispatch analyst Dessislava Ianeva compared the bill to the GENIUS Act, which set federal rules for payment stablecoins last year. She warned investors not to expect an immediate, lasting price spike just because the banking committee approved the bill.
Ianeva pointed out that when a Senate committee approved the GENIUS Act last March, Bitcoin rallied 7.5% over two weeks but quickly lost all those gains by early April. The real price surge happened right before the actual floor votes took place. Bitcoin eventually hit an all-time high of $124,715 exactly 207 days later on October 6. She told investors that the next major turning point will be the Senate floor vote, not this week’s early committee decision.
Beyond Washington politics, serious global economic fears drove crypto prices down this week. New government reports showed that U.S. consumer and producer prices are rising faster than economists predicted. The ongoing war in Iran has caused oil prices to jump significantly. These higher energy costs are now hitting American shoppers and factories directly in the wallet.
Investors reacted to this hot inflation data by betting on higher interest rates. People trading on the Kalshi prediction market now see a 60% chance that the Federal Reserve will raise interest rates before July 2027. High interest rates make borrowing money expensive. This environment usually hurts risky, speculative investments like cryptocurrency because investors prefer the safety of government bonds.
Geopolitics also failed to lift market spirits heading into the weekend. President Trump wrapped up his highly anticipated trip to China on Friday without announcing any breakthroughs. Trump and Chinese President Xi Jinping said nice things about each other, but they shared very few actual details about their trade talks. China had previously stated that Taiwan would be its main focus during the meetings, though neither leader said much publicly about the island.
Trump spoke to Fox News on Thursday evening and claimed China agreed to buy American oil, Boeing airplanes, and farm goods. He also said China would open its borders to the Visa payment network. However, neither side provided any hard evidence or written specifics to back up these massive trade claims.
The leaders also made little progress in stopping the war in Iran. Trump claimed Xi wants a peace deal and wants to keep the Strait of Hormuz open for global shipping. Trump added that China refuses to support Iran charging tolls in the vital waterway and promised not to send military equipment to Tehran.
Meanwhile, Trump escalated his own threats against Iran. He demanded that Tehran accept a trade deal, warning that he is losing his patience with the country. The president threatened to launch more crippling military strikes against Iranian targets. Just days earlier, he told reporters that the current ceasefire between the United States and Iran is on massive life support.
