Circle shares tumble after the new Clarity Act draft threatened stable coin rewards and retail traders are losing more on prediction markets than sports books.

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Shares of USDC issuer circle plummeted 20% on Tuesday, ending a massive weeks-long rally

that doubles the price.

Coinbase, which shares revenue from the stable coin, also took a nearly 10% hit.

The sell-off was triggered by new language in the upcoming

Clarity Act that proposes strict bans on offering rewards for simply holding stable

coin balances. Circle currently collects interests on USC's backing assets and passes it to Coinbase,

which then funds rewards for users. The new draft aims to kill that pass-through model

by banning anything economically equivalent to interest.

Analyst at Clear Street called the drop an overreaction, noting that Circle is still up over 30% this year.

But with Tether, simultaneously announcing a full audit of its reserves by a Big Four accounting firm,

circles facing mounting pressure from both regulators and its biggest rival.

Derbitt will sell Bitcoin options contracts worth a staggering $14.16 billion this coming Friday,

which represents nearly 40% of all open interest on the options exchange.

According to Deribut data, $75,000 is the max pay in price, which may act as a price magnet

as market makers hedge and large option

writers try to minimize payouts. Implied volatility has compressed and institutional traders are

selling calls at higher strikes, signaling measured bullishness and expectations for a relatively

controlled expiry despite geopolitical tensions. And prediction markets are the hottest trend in crypto,

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