How a Surprise Clarity Act Vote Could Move Crypto Prices

**Steven Ehrlich** (0:00)
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**Steven Ehrlich** (0:37)
All right. So we're just about time, but I do want to touch on the other big topic of the day, Clarity Act. As Yogi Berra once said, it's starting to get late early. And as we're speaking right now, I believe there is a meeting happening at the White House between President Trump, his Chief of Staff, Suzy Wiles, some Republican senators that have been involved in negotiations and I think Kristen Smith, the president of the Blockchain Association. And they're really going to try to hammer out some sort of agreement on ethics, which is a key, I guess a key linchpin to get any sort of democratic support for the bill to pass for anyone watching, who's not familiar with the legislative process for this type of bill and most Senate bills to go into law, you do need to get 60 votes, which means that I believe you need at least seven Democrats.
One version of the Senate banking bill got out of committee on a bipartisan basis, but the two Democratic senators who voted for it said that they more or less voted for it in good faith to continue negotiations on things such as ethics, and that their votes on a full floor vote are not guaranteed.
And we're actually awaiting a new version of the Senate bill any day. A few sources I talked to said it could be as early as tomorrow or maybe more likely on Monday. But I mean, this would be, if this meeting goes well and there's a way forward and then it does look like we could see clarity get passed into law before the August 7th deadline, I mean, that would be the catalyst for the rocket fuel that you were just making. And in my opinion, I mean, no one wanted to go through all the tumult that's been involved in negotiating this very comprehensive bill. But maybe the silver lining is that at least this could be one bullish instance where it's not a by the rumor sell the news because the rumor has been, gets quote unquote dissipating and the news could come quickly. So this won't necessarily be a repeat of when Coinbase went public in 2021
Perhaps it's more like when, or when President Trump actually became president, that's when the market kind of crested. Maybe it's more like when the ETFs went live and I guess it was what, January 2024? Is that when? I always give a year's mixed up, but I just wanted to get your, I wanted to get your thoughts on, I know you're not a policy wonk, think this isn't what you do, but I'm sure you're seeing traders positioning for all sorts of outcomes here. And this one is binary and it can be coming up soon. So what are you saying?

**Andy Baehr** (3:16)
Well, in the long-term, it would be really important to get legislation passed, and it's painful to think about any time that the industry or other industries might have wasted in the past to get us where we are today.
You're right, I'm not a policy wonk, and we do have some really smart and sharp people at GSR, who have a much keener sense of the details.
My zoom out take is, the longer something takes to happen, the less chance it'll get done. We're in a time period frame now where we need almost zero distractions and a pretty solid tailwind to get that much done in three weeks. Polymarket odds were at 75 percent in May, and now they're a little under 40 percent. They've come down linearly, and it's just speak to this. Every day that it's not done is a day wasted. The ethics question, it's hard for me to not think of that as a delicious political nugget that some people want to wrap up and take home with them to eat another day, to point to the president's personal interests in digital assets. Of course, the disclosure a couple of weeks ago, he's made well clear of a billion dollars between himself and his family, is red meat for the Democrats. It's important that it gets done. I do think at this point, the reason that it would be a good support for the market is it would be a surprise. I do think the market would take it as a surprise that passage takes place. It's not gonna be a, yep, thought so, no big deal, we expected this. I don't think it's priced in right now. And so, surprise is one of the most powerful I guess, emotions that can help fuel either up or down moves in prices. So, passage would be a surprise and I think it would be hard to imagine a market that doesn't experience some lift.