Circle, Robinhood, Coinbase Stocks Tumble on Regulatory Concerns

TLDR

• Crypto stocks crashed on January 15-16, 2026, with Circle down 9.67%, Robinhood down 7.78%, Coinbase down 6.49%, and Strategy down 4.68%
• The sell-off began after Coinbase CEO Brian Armstrong withdrew support for the CLARITY Act, calling it “materially worse than the current status quo”
• The Senate Banking Committee canceled a scheduled vote on the crypto market structure bill following Armstrong’s statement
• More than $20 billion in market value was erased across crypto-related stocks including Exodus, Bitmine, CleanSpark, and Riot Platforms
• Companies like Kraken, Ripple, Circle, and Andreessen Horowitz continue to support the bill despite the controversy

Crypto stocks experienced steep losses on January 15 and 16, 2026, after Coinbase pulled its support for pending federal legislation. The move triggered a chain reaction that led to billions in lost market value across the sector.

Circle stock fell 9.67% to $76.60. Robinhood dropped 7.78% to $110.36. Coinbase declined 6.49% to $239.26. Strategy lost 4.68%, closing at $170.93.

Robinhood Markets, Inc., HOOD

The downturn started late on January 14 when Coinbase CEO Brian Armstrong issued a statement. He said the company could not support the CLARITY Act as written. Armstrong called the current version “materially worse than the current status quo.”

He added that having no bill would be better than passing a bad one. Hours after his statement, the Senate Banking Committee canceled a markup session scheduled for January 15.

The CLARITY Act is bipartisan legislation that passed the House of Representatives in July 2025. The bill aims to create a regulatory framework for digital assets. It does not cover stablecoins, which fall under separate legislation called the GENIUS Act.

Market Impact Spreads Across Sector

The sell-off extended beyond the largest names. Exodus dropped 11.09%. Bitmine fell 5.48%. CleanSpark lost 4.42%. Riot Platforms declined 4.33%.

MARA, Bitfarms, Bullish, and Canaan all posted losses between 3% and 6%. PayPal, Block, SharpLink, Metaplanet, Hut 8, Neptune, and GREE also traded lower. Combined losses across these companies exceeded $20 billion.

Even smaller firms felt the pressure. American Bitcoin Corp fell 4.26%. Meliuz dropped 6.03%. Gemini, Bit Digital, and Semler Scientific all closed in negative territory.

A few stocks bucked the trend. Galaxy Digital rose 13.46% on volume exceeding $849 million. Bitdeer gained 3.39%. Nexon and Net Holding also finished higher. Strategy recovered on January 16, rising 3.5% as Bitcoin rebounded.

What Armstrong Criticized

Armstrong’s main concern centers on changes to the bill’s draft released in early January 2026. He said the legislation weakens the role of the Commodity Futures Trading Commission. The CFTC was supposed to be the primary regulator under the original framework.

The CEO also criticized provisions affecting decentralized finance, privacy protections, and stablecoin reward programs. He described these changes as moving backward from current rules.

Robinhood CEO Vlad Tenev took a different stance. He said the United States needs to lead on crypto policy. Tenev called for legislation that protects consumers while enabling innovation. He acknowledged work remains but expressed support for moving forward.

Industry Remains Divided

Other major players continue backing the bill. Kraken, Ripple, Circle, and venture capital firm Andreessen Horowitz have maintained their support. These companies argue the legislation replaces enforcement-based regulation with clear rules.

Supporters say the framework will help American companies compete globally. They believe it will reduce legal uncertainty that has slowed product development.

Critics from both parties have raised concerns. Some Democrats and privacy advocates warn the bill could enable excessive surveillance. They also argue it weakens consumer protections by shifting authority from the Securities and Exchange Commission to the CFTC.

The controversy touches on provisions related to stablecoin rewards, privacy in decentralized finance, and tokenized equities. These elements remain contested as Senate discussions continue.

Circle traded $1.2 billion in volume during the sell-off. Coinbase saw $83.4 million in trading activity. The broader market showed strength, with the Dow Jones closing up 292 points at 49,442. The S&P 500 ended at 6,944 and the Nasdaq finished at 23,530.

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