Digital asset ETFs see $590M in outflows as CLARITY Act stalls in Senate

Investor sentiment in the US digital asset market is wavering after the Senate's path forward for the CLARITY Act — the country's digital asset market structure bill — grew uncertain, with spot digital asset ETFs recording a combined $590 million in net outflows in a single day. While the bill has not been scrapped entirely, the shrinking window for renegotiation has put markets on alert.

According to digital asset data platform SoSoValue, US spot Bitcoin ETFs recorded net outflows of $450.33 million on Tuesday (local time). That reversed a net inflow of $160.04 million from the previous session on Monday — a turnaround that came in just one trading day. The daily net outflow from spot Bitcoin ETFs was the largest in roughly three months, since June 25.

Spot Ethereum ETFs also saw net outflows of $141.47 million on the same day, reversing $121.02 million in net inflows recorded on Monday. Combined, net outflows from spot Bitcoin and Ethereum ETFs reached approximately $591.8 million in a single day.

The outflow trend continued into the following session. As of 9:10 a.m. Thursday, spot Bitcoin ETFs and spot Ethereum ETFs had recorded net outflows of $99.15 million and $13.93 million, respectively, on Wednesday (local time).

One factor weighing on investor sentiment is the Senate's failure to advance the CLARITY Act through a cloture vote. The Senate held a cloture vote Tuesday to proceed with debate on the bill, but it failed 49-50 — falling short not only of the 60 votes needed for passage but also of a simple majority. The result has fueled growing expectations in the market that legislation may be difficult to pass before year's end.

Lee Jun-ho, a researcher at Hana Securities, said in a report Thursday that the vote outcome should be read as a delay in the timing of the legislation rather than its outright collapse. He noted that the GENIUS Act — last year's stablecoin regulation bill — also failed its first procedural vote before passing on a second attempt, making it premature to declare the CLARITY Act dead based on a single vote.

The legislative calendar is tighter for the CLARITY Act than it was for the GENIUS Act, however. "Since the Senate enters recess for constituency activities ahead of the midterm elections starting Oct. 5, if additional negotiations are needed, the timeline could slip to the first half of next year," Lee said.

The Democratic Party has long objected to the bill, arguing that it lacks sufficient conflict-of-interest safeguards regarding President Donald Trump and his family's digital asset ventures. The banking sector has also raised concerns that expanded stablecoin yield payments could trigger deposit outflows. Republicans incorporated some of those demands through last-minute amendments but ultimately failed to secure bipartisan consensus.

Lee said that even if the CLARITY Act is delayed, the broader trajectory of US digital asset institutionalization remains intact. He pointed to the GENIUS Act already having been enacted, and to the SEC and the Commodity Futures Trading Commission using their existing authority to build out a regulatory framework for digital assets.

The delay could also have indirect implications for South Korea's own regulatory timeline. Lee noted that with domestic discussions on second-phase digital asset legislation already lagging, a further delay in US market structure legislation could push back South Korean policymakers' deliberations as well, given their tendency to reference the US framework.

"Since deposit outflows and stablecoin yield issues remain unresolved sticking points in the CLARITY Act in the US, there will likely be spillover effects on domestic discussions," Lee said. "Unlike global companies, Korean firms have been operating in an environment where commercialization ahead of regulation is difficult, and there is a risk that their competitiveness will continue to erode."