Bitcoin and Ethereum prices fell sharply on Wednesday, September 16, 2026, as the crypto market reacted to the failure of the US CLARITY Act in the Senate and waited for the Federal Reserve’s interest-rate decision later in the day.
Bitcoin opened at $75,586.51 on Wednesday, down 3.3% from Tuesday’s opening price. By 7:12 a.m. ET, Bitcoin had recovered slightly to $75,885.53, according to Yahoo Finance.
Ethereum also opened lower at $2,397.64, falling 4.6% from Tuesday’s opening price. Ethereum later moved up slightly to $2,404.43.
The two biggest cryptocurrencies were still significantly lower than at the same time on Tuesday. The decline came as investors reacted to a setback for US crypto regulation and prepared for a potentially important Fed decision.
CLARITY Act fails in Senate vote
A major reason behind Wednesday’s crypto sell-off was the failure of the Digital Asset Market CLARITY Act to advance in the US Senate. The bill failed a procedural Senate vote on Tuesday because it did not receive the required 60 votes. The setback raised fresh uncertainty around efforts to create a clearer regulatory framework for the US crypto industry.
The CLARITY Act had been viewed as an important piece of legislation for the digital-asset industry. Its failure means the industry will have to wait longer for lawmakers to reach an agreement on rules governing digital assets.
{{/usCountry}}The CLARITY Act had been viewed as an important piece of legislation for the digital-asset industry. Its failure means the industry will have to wait longer for lawmakers to reach an agreement on rules governing digital assets.
{{/usCountry}}Senate Democrats blocked the bill’s advancement because of concerns over government ethics provisions and potential conflicts of interest involving the president. The concerns are particularly significant because President Donald Trump and his family have been involved in crypto investments and other digital-asset businesses.
Galaxy Digital CEO Mike Novogratz criticised the Senate’s failure to advance the bill. He said the crypto industry had spent about 18 months working with Democrats and Republicans on the legislation before the effort broke down at the final stage.
Novogratz said most of the major disagreements had been resolved through compromise, but ethics remained a major sticking point. He argued that Republicans were concerned about placing limits on a president’s ability to profit from digital assets, while Democrats wanted to address what they viewed as corruption risks, according to Yahoo Finance.
Novogratz described the situation as a major setback for the crypto industry and the US. His comments were reported by Yahoo Finance, which cited his post on X.
Why the Fed decision matters for crypto
The crypto market is also under pressure because investors are waiting for the Federal Reserve’s interest-rate decision on Wednesday. Markets were expecting the Fed to raise interest rates later Wednesday. If the central bank does raise rates, it would be the first US rate hike in three years, according to Yahoo Finance.
Interest-rate decisions can have a major effect on assets such as Bitcoin and Ethereum. Higher rates can make safer interest-bearing investments more attractive and can reduce investors’ willingness to take risks.
That makes the Fed decision another important factor for crypto prices today. Investors are watching both the central bank’s decision and what Fed officials say about the future path of interest rates.
The combination of the CLARITY Act setback and uncertainty ahead of the Fed decision has added pressure to crypto prices. Bitcoin and Ethereum were already moving lower before Wednesday’s market session fully developed.
Bitcoin’s recent price performance
Bitcoin’s Wednesday opening price was also lower compared with its recent levels. It was down 3.6% from one week ago. Despite the weekly decline, Bitcoin was still up 19.9% compared with one month ago. This shows that the latest fall comes after a strong monthly rise.
Bitcoin was down 34.5% compared with one year ago. Bitcoin’s all-time high was $126,198.07, reached on October 6, 2025. Bitcoin’s all-time low was $0.04865, recorded on July 14, 2010, according to Yahoo Finance.
Ethereum’s recent price performance
Ethereum opened Wednesday 3.5% lower than one week earlier. However, Ethereum was still up 27.5% compared with one month ago, despite Wednesday’s sharp decline. Ethereum was down 47% compared with one year ago, Yahoo Finance reported. Ethereum reached an all-time high of $4,953.73 on August 24, 2025. Its all-time low was $0.4209 on October 21, 2015.
What crypto investors should watch next
The immediate focus for crypto investors is the Federal Reserve’s decision later Wednesday. The decision and the Fed’s comments could influence expectations for future interest rates and broader market risk appetite.
Investors will also continue watching developments around the CLARITY Act. Its failure in the Senate means uncertainty around the future of US crypto regulation remains. For now, Bitcoin and Ethereum are being hit by two separate sources of uncertainty: the US crypto legislation setback and the Fed’s upcoming interest-rate decision.
Bitcoin’s move to $75,885.53 and Ethereum’s move to $2,404.43 by 7:12 a.m. ET showed some recovery from their opening prices, but both remained under pressure compared with the previous day.
What investors should know
The fall in crypto prices does not change the tax rules that apply when investors sell digital assets. In the US, investors generally owe taxes when they sell cryptocurrency for more than they paid for it. Exchanging one cryptocurrency for another can also create a taxable event. For example, exchanging Bitcoin for Ethereum is generally treated as a taxable transaction by the IRS when there is a gain or loss.
Crypto taxes are generally reported on the tax return for the year in which the transaction happened. So, crypto profits from transactions made during 2025 would generally be reported on the 2025 tax return filed in 2026. The amount of tax an investor pays depends mainly on how long the crypto was held, as well as the person’s taxable income and filing status.
Crypto held for one year or less is generally subject to short-term capital-gains tax rates, while crypto held for more than one year generally receives long-term capital-gains treatment. The holding period can therefore affect the final tax bill, making the timing of a crypto sale important for investors.