Wall Street Giants Back $15M Push to Quantum-Proof Bitcoin as the CLARITY Act Nears a Do-or-Die Deadline

**Jennifer Sanasie** (0:00)
On today's Public Keys at the New York Stock Exchange, will the Fed hike rates? What could the Clarity Act mean for crypto markets? A new security consortium is forming to strengthen the Bitcoin network. Plus, Ethereum ETF inflows outpace spot Bitcoin funds, and it's Perps Week at CoinDesk. I'm Jen Sanasie. Let's get into it.
Happy Monday, everyone. Joining me to kick things off this morning is Charles Schwab's head of crypto research, Jim Ferraioli, a chartered market technician who spent more than a decade at Morgan Stanley as a portfolio manager and crypto strategist before joining Schwab. Jim, welcome.

**Jim Ferraioli** (0:39)
Welcome. Thanks for having me on.

**Jennifer Sanasie** (0:40)
Thanks for being here. Let's just start here. Last time I checked, the price of Bitcoin was hovering around $64,500. What are you watching this week?

**Jim Ferraioli** (0:49)
Yeah, so one of the things that we continue to watch is where flow is coming from. Are we getting inflows to ETS? What's happening in futures and derivatives markets? Is open interest expanding there? What's happening with funding rates? Those are kind of like the week to week things, but obviously the big metric and market focal point for the week is going to be what happens with the Fed. So, there's odds of something like a pricing in maybe 36% chance of a hike. So, obviously that would be a short term negative for cryptocurrency prices. So, that's what we're watching there and remains to be seen what the Fed does.
I think markets are pricing in something like three rate hikes over the next year or so. And if that were to happen, again, maybe if it's priced in less of an impact, but it remains to be seen what the Fed actually does.

**Jennifer Sanasie** (1:42)
What language are you watching for as we hear from the Fed this week?

**Jim Ferraioli** (1:46)
You know, I want to make clear my colleague, Colin Martin, he's the interest rate Fed guru of the team.
And I'll channel his view that the Fed is probably going to be hawkish here. It seems Chairman Warsh has been putting on a hawkish posture, and maybe that helps reduce the need to actually hike rates, if you can kind of portray that hawkishness through market commentary and Fed releases, maybe that does the work for you.

**Jennifer Sanasie** (2:17)
You know, speaking about what we're watching, another big milestone catalyst, something that we've been talking about all year is clarity. I know that from reading your report, that you're saying clarity is very much so priced in. Talk me through a little bit of your view on the Clarity Act. If it passes, what happens to crypto markets?

**Jim Ferraioli** (2:37)
Yeah. So clarity has been the major fundamental catalyst we've been tracking all year. And to clarify, we do not think it's priced in at these levels. We've been tracking the daily Clarity Act odds of passage in 2026 And we look at that with a consortium of different factors and see what's been driving Bitcoin's prices on a day by day basis. And in general, year to date, on average, Clarity Act odds, whether they're increasing or falling that day, can only really explain about 4% of Bitcoin's daily price move. And so we think that Clarity Act passage is not being priced into Bitcoin here. And I think that's important for two reasons. So first, if it gets delayed beyond summer recess, first, we think the odds of it passing before midterms are very low.
Once you get back from summer recess, it's campaign time ahead of midterms. And so in that case, we don't think that would be a negative for Bitcoin's price. It doesn't appear to be priced in at these levels. The flip side, if it were to pass in the next couple of weeks, we think that is really serving as a legislative call option. Earlier this year, first, we launched trading. And another large financial institution had a high-profile ETP launch. And both of those were earlier on in the spring. And what you saw around that time is Bitcoin price rallied about 25% because you had a return to this institutional adoption narrative. And so we think the passage of the clarity could reignite some upward momentum. I don't want to say 25%.
But we think it could bring about a return to the narrative of institutional adoption, which has kind of quieted it down over the past few months.

**Jennifer Sanasie** (4:26)
Sorry about putting words in your mouth. I must have misread something there. Talk to me a little bit more about the other points that you've looked at that are contributing to Bitcoin's price movement. It hasn't really moved much.