Bitcoin, the Clarity Act & Why Crypto Markets Still Face Volatility

All right, everyone, let's talk some digital assets.

Joining me now with more of course as we look at the space is Sean Farrell.

He is head of digital asset strategy at Fundstra Sean, it's great to have you joining us remotely this afternoon, rounding out a pretty big week on Wall Street across the country and the globe.

What is the significance of the Clarity Act advancing now to a Senate vote.

Yeah, thanks for having me.

Um, yeah, I mean, clarity is huge for market structure, you know, certainly opens up the, widens the aperture for, um, you know, traditional financial market participants to get more involved in the digital asset space, not just in, you know, endogenous crypto assets, but, you know, for, um, you know, in dealing with tokenized stocks, commodities, etc.

Um, you know, and it, it provides just a, a reliable framework for folks and, and lowers that regulatory risk premium going forward.

Bitcoin trading just a little bit below $80,000 a token.

Do you think that this crypto asset can reclaim a high that it saw, you know, within the past six months or so we're talking about about $120,000 a piece.

At some point, yeah, uh, and I don't think it's gonna happen anytime, anytime soon, unfortunately.

Um, you know, we, we were pretty measured coming into the year.

Uh, I think there was just a lot working against the asset class after what was, you know, uh, pretty much a 3-year bull market.

Um, you know, I think near term, there are things to be excited about.

One of those things is clarity, you know, like you said, it did advance through, um, you know, from that Senate, the Senate Banking Committee markup, it's gonna receive a Senate floor vote, which, you know, could result in a constructive outcome.

I'm not sure that, you know, um, begets material inflows into the space, uh, in any structural way in the, in the immediate term though.

The other, uh, constructive factor is that, you know, strategies stretch variable rate preferred stock has been, um, you know, reliable source of inflows into the crypto complex and, uh, the important, uh, thing to note about this security is that, uh, you know, it's, it's, these are non-directional flows.

So these are, uh, flows that are not speculating on the, the price direction of Bitcoin, and so, you know, I expect those to be, uh, you know, remain rather robust, um.

Uh, you know, but, you know, in terms of the broader backdrop, I think there's, you know, there's a lot of wood to chop here over the next, say, 1 to 3 months, I think, you know, on your, I've tuned into some of your segment, I think some folks have already noted how, uh, right now, the backdrop, you know, looking at the sell-off and sovereign debt, um, you know, some inflate hot inflationary figures, um, you know, with a new Fed chair coming in, I think that sets up for, for a pretty tricky, tricky setup overall here in the near term.

And so, you know, I, I, I'm, overall, I, I think we're Uh, you know, we'll say 80% of the way through the pair market, but, um, you know, maybe a little more room to go before we can say all, all systems go.

All right, well, Sean Farrell, head of digital asset strategy at Fundstrap, thank you so much for joining us here today.

Thank you.