Bitcoin stabilized on Monday, halting its weekend rally, as escalating tensions with Iran dampened optimism stemming from progress toward establishing a U.S. regulatory framework for cryptocurrencies.
The world's largest cryptocurrency rose 0.2% to $80,833.90, after peaking at $82,000.00 over the weekend, before giving up most of its gains by Monday.
Sentiment was also weighed down by the prevailing caution ahead of the release of key US consumer price index data due this week, as well as the high-level US-China summit.
Tensions escalate between the United States and Iran as the peace process falters.
Tensions between the United States and Iran escalated over the weekend, particularly after US President Donald Trump largely rejected Iran's response to his 14-point peace proposal.
Trump described the Iranian response as completely unacceptable, while Iran rejected US demands to dismantle its nuclear facilities and called for a shorter-term suspension of uranium enrichment activities.
Iran announced plans to end the war and gradually restore commercial navigation through the Strait of Hormuz, and Tehran demanded that the United States lift the naval blockade imposed on the country before embarking on any nuclear negotiations.
Weekend developments indicated that there was no imminent de-escalation in the conflict with Iran. Separately, Israeli Prime Minister Benjamin Netanyahu confirmed that the war was not over and hinted at the possibility of further military operations against Iran.
The US Senate is preparing for a session on the Clarity Act.
Members of the US Senate are preparing to hold a session to consider a long-awaited bill, the Clarity Act, which aims to establish a regulatory framework for cryptocurrencies.
The Senate Banking Committee is scheduled to hold an important hearing to vote on the Transparency Act on May 14, with the goal of moving forward with passing the bill.
Lawmakers appeared to be nearing a settlement on the ongoing dispute over stablecoin yields, with the legislation expected to prohibit negative returns similar to bank deposits, while allowing rewards linked to active transactions and validation (staking), in order to address concerns from lobbyists in the cryptocurrency and banking sectors.
If the committee approves the bill, it will go to the full Senate for a vote in early June. The Transparency Act aims to establish a more comprehensive regulatory framework for cryptocurrencies, giving the industry greater legitimacy in the U.S. market.
Cryptocurrency prices today: Altcoins stabilize amid continued uncertainty
Cryptocurrency prices advanced broadly on Monday, but significant gains remained limited by uncertainty surrounding the conflict with Iran and the Clarity Act.
Ether, the world's second-largest cryptocurrency, rose 0.4% to $2,337.56, while XRP climbed 2.8% to $1.4580.
BNB, Solana and Cardano each recorded gains ranging between 0.7% and 3.6%.
In the meme currency market, Dogecoin rose by 1.3%, while $TRUMP fell by 0.3%.
