Token AI falls 10% when the U.S. Senate rejects the federal AI regulation freeze order.

Trump's Big Beautiful bill no longer has a 10-year order freeze on AI regulations, causing some obstacles for related tokens.

The trading volume and market capitalization for AI crypto assets have both decreased by more than 5% in the past 24 hours.

Senators rejected the order to pause with an overwhelming 99-1 vote, witnessing lawmakers supporting crypto abandon this effort. However, the AI sector of the market has declined, and it is very difficult to determine the impact of the legislation.

The Big Beautiful Bill will not benefit AI

Trump's Big Beautiful bill is an important piece of legislation that encompasses many topics. Intense political controversies have caused the bill to change form multiple times, but it was finally passed by the Senate today.

However, the senators rejected the support for AI in the bill, highlighting significant criticism directed at the entire industry.

The vote was nearly unanimous, signaling real concern for the industry. Indeed, the only senator who voted for this bill, Thom Tillis, stated that he will not seek re-election.

Many crypto assets associated with the AI industry have experienced significant impacts since the language of the bill changed. Market capitalization and trading volume have both decreased by more than 5%:

The market capitalization of the AI sector | Source: CoinMarketCapTherefore, this raises a few questions. How does the Big Beautiful bill impact AI? Why did the Senate reject it by an overwhelming vote? Will the AI token market continue to see declining trading volume and market capitalization?

Basically, the plan of the bill is to impose a 10-year moratorium on AI regulations for all states in the United States. This could be implemented in the form of a complete ban or another method.

The bill will propose a fund of 500 million USD for the development of AI infrastructure, but only states without any regulations on AI will be able to access this funding. Google and OpenAI have supported the plan.

Such a vision will create many problems and the senators supporting crypto have spoken out against it. If the bill bans the enactment of AI regulations for 10 years, states will not be able to prevent AI-related crimes in the future.

Criminal acts include fraud or copyright infringement, and may even use AI tools to simulate images of child abuse, as some Senators have warned.

Unfortunately, it is very difficult to conclude how the bill will impact the AI token market in the long term.

For example, Elon Musk's opposition to the bill has caused some Musk-related memecoins to thrive, but Dogecoin has dropped by more than 5%. This chaos may create new opportunities, but it's uncertain where they will come from.

Moreover, the AI token sector had declined before the bill was passed. This 5% drop is quite concerning, but the trading volume of AI assets has decreased by more than 38% in the past 30 days.

Compared to other macroeconomic concerns, the current barriers may not have a long-lasting impact on this sector.

Vincent