U.S. Representative Byron Donalds announced this week that he purchased up to $100,000 worth of Bitcoin. This development has drawn attention due to his membership in the U.S. House Digital Assets Subcommittee.
This move has occurred amid increasing scrutiny of lawmakers' stock trading, and has sparked speculation that the Cryptocurrency Market Structure Act may be nearing passage. This could be a bullish factor for Bitcoin prices.
The significance of Congress purchasing Bitcoin
The Digital Assets, Financial Technology, and Generative AI Subcommittee is responsible for drafting and reviewing legislation regulating the digital economy.
As the cryptocurrency market rapidly expands, this committee plays a central role in establishing clear regulatory frameworks for cryptocurrencies and broader financial technologies.
Given that Mr. Donald is a member of this subcommittee, concerns have been raised that lawmakers may have access to some information before it is publicly disclosed, particularly regarding the timing of this Bitcoin purchase.
This purchase has sparked speculation about Bitcoin's future, especially following the start of the new year. As of this article's writing, Bitcoin is trading at $91,370. After months of volatile swings, the price dropped as low as $84,000 and failed multiple times to regain the $100,000 level.
Among market analysts, there is growing concern that declining demand for cryptocurrencies may signal Bitcoin's entry into a bear market. In an interview with BeInCrypto, Julio Moreno, an analyst at CryptoQuant, predicts Bitcoin could drop to $56,000 by 2026.
However, there are also signs of optimism for Bitcoin. Large-scale purchases by influential members of Congress may suggest expectations of a rebound before market pressures intensify.
The ongoing cryptocurrency market structure bill currently under congressional review may serve as a catalyst for Bitcoin's rebound.
Why the Clarity Act is important for Bitcoin
In July, the House passed the 'Clarity Act,' aimed at regulating the cryptocurrency market. Since then, the Senate has been advancing its own bill, the 'Responsible Financial Innovation Act.'
The current Senate bill is under review by the Senate Agriculture Committee and the Banking Committee. The Agriculture Committee has already released a draft for review, while the Banking Committee has not yet published its version.
Only after this process is completed can a vote be held in the full Senate. If approved by a majority, the bill will return to the House for final approval, and then be signed into law by President Trump.
Despite repeated political hurdles, reports suggest the Clarity Act could be passed as early as March. If realized, it could have a significant impact on Bitcoin's price.
The passage of the GENIUS Act last July illustrates the impact regulatory news can have on the market. After President Trump signed it into law, Bitcoin surged to $119,000. There are also voices suggesting similar movements could be expected if the Clarity Act is passed.
For years, the cryptocurrency market has operated under uncertainty regarding regulation. Clear legislation would serve as a crucial source of trust for consumers and investors. Such market structure bills could become significant new regulatory elements.
On the other hand, Mr. Donald's recent Bitcoin purchases have reignited a broad discussion about banning stock trading by lawmakers.
U.S. Congress faces insider trading issues
Mr. Donald is one of the lawmakers whose investment activities are closely watched due to his privileged position.
In October last year, BeInCrypto reported that Louisiana Representative Cleo Fields, a member of the Financial Services Committee, made a timely trade in shares related to IREN, a Bitcoin mining company. Representative Fields achieved a return of 233%.
Late that month, Representative Jonathan Jackson, a member of the Subcommittee on Commodity Markets, Digital Assets, and Rural Development, made his first purchase of Robinhood stock.
This debate extends beyond cryptocurrency to all stock trading.
This issue has long been pointed out, but in the past year, efforts to draft legislation preventing lawmakers from trading on non-public information have intensified again.
On Saturday, Representative Ritchie Torres announced his intention to introduce a bill that would ban government and federal employees from engaging in speculative trades based on non-public information. Representative Torres, like Mr. Donald and Mr. Jackson, is also a member of the Digital Assets Subcommittee.
In October, Representative Ro Khanna introduced a bill that would prohibit the President, his family, and lawmakers from trading in cryptocurrencies or stocks, as well as receiving foreign funds.
