Clarity Act on the Clock: Bitcoin Rallies as Legislation Faces Key Deadline

**SPEAKER_1** (0:00)
Director Equity Research, Charles Schwab, is with me now. We're seeing the rally underway. What do you attribute this move that we're seeing unusual to finally see Bitcoin not only break out of the 60s, but above 72,000?

**Adam Lynch** (0:16)
Yeah, yeah, it's a great thing to see, isn't it, Nicole?
So we are, like you mentioned, at about 72,500. Bitcoin's up about 11% this week. It's been a great week for most of these cryptocurrencies. This is the first time Bitcoin's been above 70,000 since early June. Like you mentioned, it's broken through those technical levels, 100, 200-day trading averages. The last time it was above its 200-day was in October, when it was trading well above $100,000.
Ethereum's recent outperformance continued this week as well. It was up even more, up about 20% trading around 2,300 or so after being range-bound around 1,800 or so recently. Like Bitcoin, it's also above those technical averages. Those are long-term trend indicators, and price breaks above them are technically seen as bullish signals. So hopefully, we can see the currencies maintain those prices and stay above those moving averages going forward.

**SPEAKER_1** (1:18)
Do you expect this number to continue to move higher going into the September 15th date? We have Representative Thune, who's been pushing forward. I heard today that both sides of the aisle seem closer and more likely to pass the Clarity Act, which is on the agenda for September 15th. Do you expect Bitcoin, Ethereum, crypto, that they could, is this a soft sort of bull market moment to have this technical breakout? Could it continue higher here?

**Adam Lynch** (1:48)
I do think so. We have been looking for some sort of certainty around any type of regulation for a while here. And when we've thought that it would be a positive catalyst, if we see some movement on it. So seeing these recent comments coming out, I think yesterday there was a little bit of a crypto summit at the White House, where we had executives from Coinbase and blockchain and a few others get together. And yeah, President Trump reiterated that he wants that passed and he wants the Senate to take it up when they get back in mid September.
We had some additional comments from the head of the CFTC, right? There's some thoughts, well, hey, if clarity does stall out, well, then where do we go? And I think seeing the CFTC step up and hearing some comments from their leader, Michael Selig, has just led to again, you know, thinking that even if clarity falls, there will be another sort of set of guardrails there established.

**SPEAKER_1** (2:44)
Right, laws versus rules, but still just to have some clarity will help in the big picture. So there is sort of a plan B. And as you noted, the summit that we saw of the crypto folks in Washington, what's interesting is the institutional surge. US spot Bitcoin ETFs crossed $1 billion in the three days of inflows. At the same time, it's my understanding that yesterday was a short squeeze moment, that there was a record number of shorts, $2.7 billion.
That was a record for a short squeeze. The largest since 2021 So some heavy trading going on. Care to talk about the surge and or the shorts?

**Adam Lynch** (3:27)
Yeah, it's been interesting to see. There's been a lot that's moved the market this week. We've talked a little bit about the crypto summit. There was also the treasury intervention into the bond market. That helps risk assets like this. And then some market internals. Fund flows have been great. Spot flows for Bitcoin ETFs yesterday over $500 million.
And then that short squeeze, there was a big short wall around $70,000 or so that our head of crypto, Jim Ferrioli had kind of identified. And we had over $1 billion in shorts liquidated in just one hour on Wednesday. Something that we haven't seen.

**SPEAKER_1** (4:05)
Yeah, that's what I was talking about. And so, I was hearing about it early this morning. So I think that's another thing. You have some short covering going on as well. As we think about why people want to have digital assets, it brings me back to, you know, I know Ethereum has been higher, but we've seen Action and XRP and Hype and some of the other names as well, right?

**Adam Lynch** (4:30)
We have. Yeah, it's been a great week for all of them.
Ripple was up about 15%, I think, this week. And then Hyperliquid, we've mentioned them a couple of times on the program. Their native token hype was up, I think, 25% yesterday after President Trump mentioned that the CFTC was working to bring their perpetual futures trading product here to US market.