The Senate Killed Clarity. The Regulators Didn't Wait.

From Yesterday's Simply Bitcoin Live | Episode 1593

The Numbers

Bitcoin held above $75,000 even as the bill it needed most died in the Senate.

The News

The Senate blocked the Clarity Act Tuesday on a 49-50 procedural vote, well short of the 60 needed to advance. Every Senate Democrat voted no, including several who helped draft the bill's language. Four Republicans, Susan Collins, Josh Hawley, Jerry Moran and Thom Tillis, also voted no, though Tillis switched his vote specifically so he could file a motion to reconsider.

Senator Cynthia Lummis didn't hold back. She said Democrats spent a year negotiating in good faith while the other side kept moving goalposts, and that the vote handed China and every foreign competitor exactly what they wanted. Senator Angela Alsobrooks, one of the bill's own co-sponsors, framed her no vote as an ethics stand against Trump-era corruption, but Republicans had already agreed to her demand on independent enforcement.

The Democrats didn't kill the Clarity Act over ethics. They killed it because pro-crypto voters were never going anywhere anyway.

Hours after the vote failed, CFTC Chairman Mike Selig posted that his agency is locked in and ready to ship its rules for the new frontier of finance. SEC Chairman Paul Atkins said the same thing in different words: with or without legislation, his agency will act within its existing authority. Both had already been building this fallback plan for weeks.

Michael Saylor jumped in too, saying he expects the SEC, CFTC and Treasury to advance rules under existing law regardless of what Congress does, with banks expanding Bitcoin custody and lending in the meantime. Strategy followed with an infographic making the same point: Bitcoin already has commodity status from the CFTC, property status from the IRS, and approved ETFs from the SEC.

Bitcoin doesn't need a law to keep working, and apparently neither do the regulators.

Bitcoin held above $75,000 even as the Clarity Act failed, a muted reaction given how loudly the bill's fate had been debated. Part of the reason: prediction markets had already priced in the failure, moving from 20 percent odds of passage to just 44 percent even at peak optimism the day before the vote.

A chart from Willie Woo showed the real story underneath the price. Coinbase, the main US on-ramp, saw a sharp wave of selling right after the vote failed. Binance, the more global and offshore exchange, was accumulating on the same news. Domestic sentiment soured. The rest of the world shrugged.

The vote was an American political story. The chart shows the rest of the market already knew that.

The Culture

Mauricio Di Bartolomeo, co-founder of Ledn and a Venezuelan native, used his appearance on the show to talk about something other than loans. He said the rolling blackouts back home that used to run four to five hours now run seven to eight, because remaining power is being routed to keep the capital looking presentable. He hears about it directly from family who now have less time to talk because there is less power to talk with.

Di Bartolomeo said he and much of the Venezuelan community initially celebrated Maduro's removal, expecting oil revenue for freedom as the trade. Instead the oil is flowing again, a regime figure with a standing warrant is reportedly still running operations, and no election has materialized. He called the deportations back to Venezuela under the premise that it is safe again ridiculous.

Getting the dictator out was supposed to be the hard part. Getting anything better afterward turned out to be the part nobody planned for.