Crypto Stocks Coinbase and Robinhood Drop Sharply Despite Bitcoin’s Rally — CLARITY Act To Blame?

Key Takeaways

• Coinbase and Robinhood stocks dropped sharply despite Bitcoin’s recent rebound, amid uncertainty over the CLARITY Act.
• Brian Armstrong, Coinbase’s CEO, withdrew support, warning that the bill harms DeFi, privacy, and stablecoin rewards more than the status quo.
• Robinhood CEO Vlad Tenev pushed for passage to unlock staking and tokenized assets, while supporters like Kraken see it as vital for U.S. crypto leadership.

Just days after crypto stocks such as Coinbase (COIN) and Robinhood (HOOD) climbed to multi-month highs alongside Bitcoin’s (BTC) move above $95,000, the rally abruptly lost steam.

On Jan. 16, both stocks slid more than 7%.

The pullback appears to be driven by growing unease over delays to the long-awaited CLARITY Act, as well as mounting frustration within the crypto industry over the bill’s latest draft and its direction.

COIN, HOOD Plummet

Coinbase shares dropped more than 7% in early Friday trading, sliding from an intraday high above $249 to below $237.

Similarly, Robinhood’s stock fell by more than 6%, retreating from a daily high of around $116.50 to a low near $110.

However, not all crypto stocks declined to the same extent.

The sharpest losses were concentrated among companies most exposed to the regulatory implications of the delayed CLARITY Act.

Coinbase, which has publicly criticized the current draft of the market structure bill, faced heavier selling due to perceived risks to its core business.

Robinhood also declined, though potentially for different reasons.

While the company has expressed support for parts of the legislation, uncertainty around timing and final provisions weighed on sentiment, even as a successful passage could eventually unlock new product opportunities.

By contrast, firms with less direct regulatory exposure fared better.

Strategy (MSTR) rose about 3.5% on the same day, benefiting from Bitcoin’s rebound without being directly tied to the bill’s outcome.

CEO Michael Saylor has not publicly weighed in on the CLARITY Act debate.

Overall, delays to the legislation pressured crypto stocks broadly, but exchanges that see the current draft as unfavorable bore the brunt of the sell-off.

If lawmakers revise and advance the bill, companies that stand to benefit could recover more quickly.

Despite the controversy, the CLARITY Act continues to draw backing from several corners of the crypto industry.

Supporters of the bill include titans like Kraken , Ripple, Circle , Andreessen Horowitz (a16z), and others.

CLARITY Act

The CLARITY Act is bipartisan legislation passed by the U.S. House of Representatives in July 2025, and was to be under consideration in the Senate this week.

It seeks to establish a clear regulatory framework for digital assets. This is excluding stablecoins, which are covered under the separate GENIUS Act of 2025.

Coinbase CEO Brian Armstrong has strongly opposed the CLARITY Act’s latest draft, calling it highly risky and not what was promised.

He went on to claim that it’s better to have no bill at all than the current version.

Armstrong criticized the dilution of power for the CFTC, the primary designated regulator under the proposed legislation.

Coinbase’s abrupt withdrawal of support on Jan. 14 led to the postponement of a Senate Banking Committee markup scheduled for Jan. 15, introducing uncertainty that has weighed on investor sentiment.

Robinhood CEO Vlad Tenev urged progress, but wasn’t as critical of the bill as Coinbase.

“It’s time for the U.S. to lead on crypto policy. Let’s pass legislation that protects consumers and unlocks innovation for everyone. We support Congress’s efforts to pass the market structure bill. There is still work to be done, but we see a path and are here to help.”

Proponents argue it replaces “regulation by enforcement” with clear rules, fostering U.S. innovation and competitiveness. 

Critics of the bill, including some Democrats and privacy advocates, warn that it could enable excessive surveillance and weaken consumer protections by shifting power from the SEC to the CFTC.

The Act’s Senate draft, released in early January 2026, includes contentious changes on stablecoin rewards, DeFi privacy, and tokenized equities, fueling the current controversy.