Crypto Investors Await Clarity Act as Bitcoin, Ethereum Hold Rally

We welcome in Adam Lynch, director of equity research. Charles Schwab, thank you so much for being with us. We know we've been on a recent upswing. We know that September 15th is a big day for the possibility of the Clarity Act so people can understand the magnitude. Month to date, it's up 27% Bitcoin. Some of your thoughts in the current situation. >> Yeah, hi Nicole. Uh, thanks for having me back. Um, it's been a great couple of weeks here for the cryptocurrencies. Um, obviously we had a nice runup last week. What had happened was the Treasury came out and announced a surprise buyback that caused the market to pop a little bit. Uh, there were also a big short short squeeze. There was a big short position around 70 75K. So, we blew through those. Uh, and it's really helped the currency's increase in value. So, now what we're seeing is them being able to maintain those levels due to some increased fund flows. So, it's great to have the market pop because of some short squeezes, but we want to see some of these higher crypto prices caused by increased demand rather than just sort of market dynamics, >> right? So, with lower leverage, this is real. This is more the real deal than the folks who believe or hold for the long term and maybe cause less volatility. Um, when we talk about crypto regulation and crypto folks want regulation, in fact, they appreciate that clarity. No pun intended. Let's talk about that. >> Yeah. So, um, you had mentioned the date coming up here, September 15th. So, whether or not clarity is dead in the water is still a little bit of a question, but we are going to see some progress there. So, on September 15th, what's basically going to happen is the Senate record confirms that Senate Majority Leader Thun has filed closure on the motion to proceed. What that essentially is is a vote before the official vote, but even during that closure, the bill must clear the 60 vote threshold. So, it'll be interesting to see whether or not they can get that done. Uh regardless of whether or not clarity makes it, though, we've seen some signs this week of the SEC and the CFTC and their willingness to step up and maybe fill the void with rules rather than legislation. Is one better than the other when you think of rules rather than the legislation? I mean, the rules would be sort of less desired than an actual law, right? >> Yeah, exactly. I mean, rules could probably be a little bit easier to implement, but they would be obviously easier to remove. So, if there was a change in the head of the CFTC or the SEC, they could immediately reverse the the rules. That would be a lot more difficult to do with legislation. So, we'd really prefer to see legislation so that we can have kind of some long-term guard rails to to be operating on, >> right? And so, when I think about what happens next, uh people are still focusing most on Bitcoin. A lot of the guests I have on, they really like to put a majority in Bitcoin and and because they they question the big gamut of crypto. What say you about all the different crypto digital assets that we can look at especially on the debasement trade? You know, Ethereum is in there and that's sort of different from from crypto and that has a lot of demand. Tell me about the big picture. >> Yeah. Uh so there are obviously quite a few choices and I think Bitcoin has obviously been the the classic. uh it is more the store of value sort of play what you're going to be investing in if you do have some sort of debasement of the fiat currency concerns then you've got Ethereum which which has a little bit more functionality towards it you've also got others like Salana uh XRP Ripple is another one that we've talked about hyperlquid I think oftentimes what you want to do is maybe have some amount of your portfolio allocated to this asset class a majority of it in the majors and then maybe some uh you know some other allocation within some of those other alternate uh cryptocurrencies which which maybe be be a little bit more volatile a little bit more risky than your your classics. >> Yeah. Yeah. And by the way uh hyperlquid that symbol is as PRR right or um and so I was watching that one on the move higher as well. Um you know I was also I have to look correct the tight the um ticker symbol but I was looking at it. Oh, and so anyhow, I'm I just wanted to talk about the rate environment because you talked about Bessence's move and that sort of gave a boost. Uh there is potential that those buybacks they went from 2 billion to 4 billion to upwards of four billion to we don't really know what. Um you know it's like to the moon to that 1 trillion mark that does that help crypto do you think? >> I think so. Yeah. any sort of u financial intervention if you will be it you know what's going on with the yen what's going on with the rates you mentioned the additional you know 2 to4 billion there's also an account that the fed can draw down so that could be another option there uh but anything when we start to see those plays start to act out right when we see the government start to get involved I think that's when yeah the the crypto rally could continue because we really do start to think about that debasement and printing our way out of this problem. Um, and gold and crypto would would probably be a good place to be were that to happen. >> Yeah, gold is up about 10 bucks today. Hyperlid is up about 16 and a half% today. >> I was off by it's purr folks, but this has really surged. I mean, just of late. It's up this month 120% almost. Adam Lynch, love our chats. I can't wait to speak to you next time or next week. Adam Lynch, director, equity research, Charles Schwab. Thank you, Adam.