Clarity Act Fails Key Senate Vote: What's Next for Bitcoin, Other Crypto Assets?

SPEAKER_1 (0:00)

Ray Salmond, now here with me on the crypto market analysis here.

To take a look at this, this procedural vote did not pass, somewhat anticipated. Then we move now from law to rules. What does that mean?

Ray Salmond (0:17)

Well, you know, it's a bit of a delay, it's a setback, but I don't really think that it's going to derail the progress, the growth and the interest that we're seeing in the crypto market.

SEC Chair Paul Atkins and CFTC Chair Mike Selig have already said on multiple occasions that each regulator will proceed with crypto rulemaking regardless of the outcome, whether clarity fails or if it becomes law at a later point, say next year or the year after. That signal has already been interpreted as truth by Wall Street and the SEC's reg crypto proposal and its tokenization exemption framework is part of that. So I think in the absence of clarity not passing, we're likely to see BlackRock, ARK Investments, Fidelity, and others lean into this SEC innovation exemption for tokenization, and we should see more securities listing, more tokenization of securities, more 24-hour trading, more integration from decentralized exchanges like hyperliquid, coin-based cracking, being integrated into the New York Stock Exchange, and vice versa.

SPEAKER_1 (1:29)

We also had a lot of commentary about other countries, and why is that? Why do we need to worry about what the other countries are doing or not doing?

Ray Salmond (1:42)

One of the things that President Trump ran on, and one of the things that his constituents wanted was the United States to lead on crypto innovation, and one of the things that the Clarity Act would have made easier is for companies that are offshore to come onshore, to reheadquarter, and to have a process of easier capital formation here in the United States for fundraising, for setting up shop, and for integrating not only back into the US economy, but into traditional finance. So doing that places most of these crypto companies and their assets within the jurisdiction of the SEC or the CFTC. And through that, you would have less scams, less hacks, less exploits, less kind of like shady players. So that was one of the main reasons why the Clarity Act needs to become law.

SPEAKER_1 (2:38)

So I'm looking at Coinbase, for example, which right now has tamed. If you look at an intraday chart, it is down 11 and a quarter percent. So even though people didn't expect it to pass, we're still seeing the reaction here in the crypto market. Same with Bitcoin. Bitcoin tanks, it's down 4.4% and Ethereum, all these intraday behaving a little better. But these intraday charts sort of do this here.

So now what when we think about the four-year rotation, have we seen the bottom on Bitcoin? That is the conversation that some of my guests who are focused on crypto have been having. Was that the bottom on Bitcoin that we saw somewhat recently?

You know, your thoughts.

Ray Salmond (3:27)

Those are all really fantastic questions.

Sure, some of the selling off that you see in the market today is related to the failure of the Clarity Act passing this key vote. But it's still a really busy week. Tomorrow we have the, today starts the FOMC, and tomorrow we're going to hear from the Fed on its decision regarding interest rates. Right now, I think the CME Fed rate tool is showing a 94 percent odd that a quarter point rate hike will be implemented. And of course, analysts are split on whether or not that's actually needed and the timing of it and what's the reality of it happening. But some of the selling and the softness that you see across crypto related equities and cryptocurrencies themselves are also related to cutting risk ahead of tomorrow's Fed rate decision.

SPEAKER_1 (4:19)

You know, I think of this sort of as the 11th hour push by some of those in Congress to try and get this through. In the meantime, you did have experts like Cathy Wood, who was selling off some of her crypto stocks. I think it was anticipated that at this point we might see a sell off. For folks who love crypto and you want to take a look out far out, you know, five years, ten years, what do you tell them on a day like this where they're seeing Bitcoin down 5% and Coinbase down 11%?

What do you tell them?

Ray Salmond (4:55)

The volatility is normal.

Bitcoin still trades within range. So it's traded in the 64,000 to 70,000 dollar range for a few months, right? Many people do believe that 58,000 was the bottom. There is a ceiling at 80K. There's a lot of sell orders there. There's a lot of short pressure there. That is kind of a psychological level that will be difficult to overcome. I think it's too early to say that it's all over for crypto simply because of this disappointing outcome with the Clarity Act today. Let's see if the Fed holds tomorrow and if markets re-pick up the bullish momentum that we saw in the previous two weeks.