Circle Stock Drops 9% After CLARITY Act Fails Senate Vote

Key Insights

• Circle stock fell about 9% on Sept. 15 as the CLARITY Act failed to advance in the Senate.
• U.S. Treasury yields climbed sharply, potentially supporting Circle’s reserve income over time.
• Arc is scheduled to launch its public mainnet on Sept. 16, adding another catalyst for CRCL.

Circle stock fell sharply on Sept. 15 after the U.S. Senate failed to advance the CLARITY Act.

CRCL traded around $88-$90 during the session after closing at $97.42 on Sept. 14. The decline came as crypto-related stocks sold off following the failed 49-50 cloture vote.

At the same time, U.S. Treasury yields climbed to multi-year highs. That creates a mixed setup for Circle because higher short-term yields can support income from USDC reserves, while rising bond yields can also pressure growth-stock valuations.

Traders on Polymarket are increasingly betting against the US passing the CLARITY Act, which will see a crucial Senate vote today. A Senate committee will vote on its cloture after President Donald Trump decided to support its ethical amendments that were advocated by Democrats.

These ethical concerns became more prominent when Trump revealed his earnings for last year. He made over $2 billion in earnings last year even as many people who invested in his tokens lost a fortune. As a result, Democrats hope that the law will bar future presidents and policymakers from launching these tokens.

Despite the concessions, there are signs that many Democrats will not vote in favor of the bill. As a result, the odds of the bill becoming law this year have dropped to just 14% on Polymarket.

Circle is highly exposed to the CLARITY Act because of its business model. It operates the second-largest stablecoin, USDC. If the bill passes, it will benefit Circle by addressing a key stablecoin issue that has been a concern for some time.

The act will also simplify cryptocurrency regulation, shifting authority from the Securities and Exchange Commission (SEC) to the CFTC.

A key catalyst for Circle shares is the rising bond yields. Data shows that the two-year yield rose to 4.65%, its highest level since July 2024. It has been in a strong upward trend after bottoming at 3.36% in March this year.

The ten-year yield jumped to 5.023%, its highest level in nearly 20 years. These numbers are important for the company because it makes money by investing in the bond market. Higher yields lead to higher revenues over time.

The rising yields come at a time when investors are moving assets to its stablecoins. The USDC stablecoin has now accumulated over $74 billion in assets. Similarly, the EURC stablecoin has gained over $455 million, which means it will benefit from rising European bond yields. The European Central Bank (ECB) hiked interest rates by 25 basis points last week and hinted it would deliver further hikes this year.

Another notable catalyst for CRCL stock is the upcoming Arc Layer-1 launch on Wednesday. This is a major development since this is a major growth catalyst for the company.

The daily chart shows that the CRCL stock peaked at $103.52 earlier this month and then retreated to $89.98 today. It has dropped below the lower side of the ascending channel shown in purple, confirming the bearish breakout.

Circle stock has formed a bearish divergence pattern as the Relative Strength Index (RSI) has continued falling to the current 52. The two lines of the Percentage Price Oscillator (PPO) have formed a bearish crossover.

Therefore, the stock will likely continue falling, potentially to the support level of $80. The bearish outlook will become invalid if the stock rises above the crucial resistance level of $103.52, its highest level this month.

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