CLARITY Act Delayed: What It Means for Markets | Markets Outlook

**Ray Salmond** (0:00)
I'd say given the amount of insider trading that's displayed on Capitol Hill and this kind of alleged insider trading that may or may not be happening in the White House, it seems likely that Clarity Act odds will be sniffed out. And you'll see that expressed in the crypto market through majors like Bitcoin, Ether, Hype, Uniswap, Ondo, Pendle, and more DeFi tokens.

**Jennifer Sanasie** (0:31)
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**Ray Salmond** (0:43)
Thanks for having me.

**Jennifer Sanasie** (0:45)
Of course, thanks for being here. We are heading into the weekend. A lot going on today and throughout the week. I just want to start here. What were you watching this week? What were you watching going into the weekend?

**Ray Salmond** (0:55)
Well, today we had the jobs report showing unemployment falling and new job creation also falling. And there's some theories that some of that is kind of the results of jobs closing after the FIFA World Cup ending.
But the major impact that that had was it triggered a rally and equities and it also may have triggered a rally in Bitcoin price, which is trading at about 65,300 right now. So I think the main takeaway is that the Fed interest rate hike has been priced out. There's the FOMC on September 16th and rate height odds actually dropped from 62% a few days ago to about 44.1% right now. So I think the market is basically reacting by reading the unemployment data and kind of suggesting that either a hike is not needed at the moment or at least further than that. So I think we're moving off the table. So traders that speculate and trade on events like FOMC, CPI and so on are having a good day.

**Jennifer Sanasie** (1:58)
You mentioned Bitcoin's reaction. Bitcoin really range bound between this 55 and 65k range for a long time. A lot of folks were waiting to see what would happen with the Clarity Act as the next catalyst for the price of Bitcoin. We now know that there is not going to be a vote before this next upcoming recess. Talk to me about how you're watching that Clarity Act news. How might we see crypto markets react or not react?

**Ray Salmond** (2:26)
Yeah, I was really surprised. So that late night reporting from Politico, Republicans said, hey, it's not going to happen. Majority leader John Thune said it's not happening. And he blamed it on the Democrats. He said the Dems insisted on no clarity vote and it's now been pushed to September. So I think, you know, sausage making of politics is always really messy. And the valid concerns that exist over consumer protections, how do banks and regional banks deal with, you know, stable coins imposing their will on the market and providing yield and apparently sucking away deposits out of banks and profits into the hands of stable coin companies. Take that as you will, right? But apparently those are all real valid issues. And furthermore, you know, the president's, President Trump's dealings with cryptocurrencies and his investments in the whole Trump meme coin has kind of put a cloud over the Clarity Act moving forward to a floor vote because of those concerns over ethics and insider dealing and that sort of thing. So my expectation really for the short term is that I'd only expect fireworks if an actual floor vote happened and it got to Trump's desk in September or after September. I'm going to stand by my previous statements that the market has a way of sniffing things out early and expressing itself by front running that news and positioning. We saw the same thing happened last week with Leopold's situational awareness getting blown up by Citadel, who basically flooded the market ahead of the FOMC to trigger a lot of volatility in AI equities, and we saw the same thing happen as tensions built in Iran earlier this year on hyperliquid, with the odds of escalation increasing, being reflected in oil futures contracts and gold perps doing insane volumes over the weekend when traditional markets were actually closed. So I'd say given the amount of insider trading that's displayed on Capitol Hill and this kind of alleged insider trading that may or may not be happening in the White House, it seems likely that Clarity Act odds will be sniffed out.
And you'll see that expressed in the crypto market through majors like Bitcoin, Ether, Hype, Uniswap, Ondo, Pendle, and more DeFi tokens.
And the way that you can track that kind of movement is aggregate open interest will rise, the funding rate will get hot, Perp's activity will begin to ramp up, and liquidations at overhead price resistance for a lot of those tokens, you'll see some fireworks there. And these are the metrics to watch as the news flow continues. And you could also look at like Polymarket and Caoshi odds, if they shift upward, that's given some insight into, you know, do people actually believe that Clarity will pass? So, I'm of the mind that when it happens, it happens. And the best gauge for, you know, kind of positioning is to look at some of the metrics that I've mentioned in advance, see how they move ahead of the actual Clarity Act vote and the Polymarket odds.