Crypto's Bear Market Hasn't Scared Off Wall Street as the Race for Clarity Continues
Institutional conviction remains intact even as time runs short for Congress to finalize crypto market structure legislation
Welcome to the Wednesday edition of the Crypto In America newsletter!
What you'll read: Wall Street is looking beyond the crypto bear market, betting on the industry's long-term future. Plus, President Trump's latest financial disclosure is drawing fresh criticism from Senate Democrats as negotiations over ethics provisions in the Clarity Act continue. TRON DAO's Adrian Wall joins the podcast, and we round up the week's top stories.
Bitcoin just wrapped up a bruising start to the year, posting losses in both the first and second quarters for just the third time in its history.
Analysts have attributed the latest market slump to a confluence of factors, including nearly $5 billion in spot ETF outflows, a strengthening dollar, expectations that the Federal Reserve could resume raising interest rates, capital rotating into AI-related equities and uncertainty over whether Congress will pass crypto market structure legislation this year.
Still, many institutional investors view the downturn as little more than a bump in the road, using the slowdown to build for what they see as the next phase of market growth.
At a conference hosted by crypto infrastructure firm ZeroHash at the New York Stock Exchange on Tuesday, institutional conviction in crypto was on full display. Executives from Morgan Stanley, Citi, BlackRock, DTCC and others gathered at one of traditional finance's most iconic venues to tout how they're bringing financial services onchain through tokenization and stablecoins.
“The value proposition is very, very obvious to people — atomic settlement, composability and borderless, frictionless payments,” said William Su, Head of Digital Assets Research at BlackRock, which has become one of Wall Street's leading proponents of tokenization. “I think you just have this big primordial goop that leads to that Cambrian explosion for tokenization to really take off and grow in the coming years.”
BlackRock was among more than 140 organizations named as partners by Open Standard, a newly formed independent company preparing to launch a stablecoin designed to compete with market leaders Circle and Tether.
ZeroHash CEO and founder Edward Woodford, whose firm counts Wall Street giants like BlackRock and Morgan Stanley among its partners, said one of the biggest shifts he's seen during this market downturn is institutions increasingly viewing crypto as a technology, rather than simply an asset class.
“It’s a broader understanding that this is a technology that can disrupt the way that value is moved, whether that be the way that dollars are moved or any other fiat currency, or fundamentally the way that securities and everything else is moved onchain globally," he said.
As traders look ahead to the second half of the year, they’ll be watching for the catalysts that have historically marked the end of previous crypto winters, including looser monetary policy, regulatory clarity and growing institutional adoption.
On that last point, some market watchers believe Wall Street’s continued engagement with the space could eventually translate into renewed demand.
“Every crypto conversation we’re having with traditional investors is focused on the long term and on several different topics — stablecoins, tokenization, prediction markets, regulation... the list goes on and on,” Ryan Rasmussen, Head of Research at Bitwise, told Crypto In America. “That’s distinctly different than at this same point in past cycles, when the only thing investors were focused on was negative price action.”
Rasmussen said he sees that as a positive sign for the months ahead.
“It tells me that Wall Street hasn’t left crypto by the wayside, and points to a second half of the year in which investor attention and appetite for crypto reaccelerates.”
Clarity Act Negotiations Continue
Major financial firms like Fidelity and industry leaders, including Coinbase CEO Brian Armstrong, believe passage of the Clarity Act could provide a meaningful catalyst for the crypto market.
The question now is whether lawmakers can get it across the finish line before time runs out.
Negotiations between industry stakeholders, lawmakers, congressional staff and administration officials are continuing this week as they work to prepare the bill for a Senate floor vote later this month. That included a meeting Monday between several law enforcement groups and administration officials as supporters continued their efforts to win over organizations that remain opposed to key provisions of the legislation.
According to sources briefed on the meeting, representatives from the Fraternal Order of Police, National Association of Police Organizations, National Sheriffs’ Association, Major Cities Chiefs Association and the International Association of Chiefs of Police attended.
However, major sticking points, including the Blockchain Regulatory Certainty Act, were not discussed, sources said. Instead, the meeting focused on educating attendees about other provisions of the bill that supporters say would strengthen law enforcement's ability to fight onchain crime. The discussion also covered other law enforcement priorities unrelated to the legislation.
That effort comes as two of the organizations represented at Monday's meeting — the National Sheriffs' Association and the International Association of Chiefs of Police signed a letter to the administration last week following weeks of similar meetings, including at least one with Acting U.S. Attorney General Todd Blanche. The groups argued the BRCA could create oversight gaps that criminal actors could exploit to facilitate illicit activity, drawing pushback from the Department of Justice, which said the letter "contains factual inaccuracies and mischaracterizes Administration policy."
Discussions are expected to continue, with the hope, sources say, that some of these groups will move from opposing the Clarity Act to a position of neutrality, potentially easing concerns among Democratic lawmakers who have cited law enforcement's objections as a reason for withholding their support.
Meanwhile, President Trump's latest financial disclosure, which shows he made more than $1 billion from his family's various crypto ventures last year, is prompting fresh scrutiny from Senate Democrats as ethics remains one of the top issues to resolve before the bill reaches the Senate floor.
According to the disclosure, in addition to holding more than $50 million in Bitcoin and Ethereum, Trump reported more than $695 million in royalties related to his meme coin. His family's DeFi venture, World Liberty Financial, also generated more than $500 million from token sales and related transactions.
“The crypto legislation heading to the Senate floor must stop the President and his family from continuing to profit off crypto,” Senator Elizabeth Warren (D-MA) wrote in an X post on Tuesday.
Senator Adam Schiff (D-CA), a member of the Senate Agriculture and Judiciary Committees who until recently was closely involved in negotiations over establishing ethics guardrails for the president in the Clarity Act, called it "the cost of corruption."
Washington is setting the rules for digital assets.
Taking place in the heart of the nation’s capital, the Injective Summit brings together the policymakers shaping the future of digital assets and the builders putting finance onchain.
Featured speakers include:
Sunayna Tuteja, the Federal Reserve’s first Chief Innovation Officer
Reps. Harriet Hageman (R-WY) and Gabe Evans (R-CO), U.S. House of Representatives
Christopher Perkins, Franklin Templeton
Crypto In America will be on the ground bringing you the interviews and insights you won’t want to miss. The most anticipated onchain finance event of the year is less than a month away.
Apply to attend here.
The “Clean Slate” Proposal That Could Rewrite Crypto’s Past
This week on the podcast, we sat down with Adrian Wall, Senior Director of U.S. Policy at TRON DAO and Managing Director of the Digital Sovereignty Alliance, for a wide-ranging conversation on the Clarity Act and what’s happening behind the scenes as lawmakers race to finish the consequential piece of crypto market structure legislation.
Adrian breaks down why he’s still optimistic about the bill’s chances, explains the “Clean Slate” proposal he wants included in the final text, and delivers one of his sharpest critiques yet of the banking industry’s stablecoin lobbying effort, saying JPMorgan CEO Jamie Dimon’s public comments criticizing the bill were “a kick in the teeth” after months of private negotiations.
We also discuss the future of stablecoins, bringing crypto innovation back onshore, and why the most transformative blockchain applications likely haven't been invented yet.
Catch the full episode on all platforms here.
Midweek Recap
ICYMI: Here are some of the biggest stories making headlines this week.
Bitcoin ended the second quarter down 14%, marking its second consecutive quarterly loss.
Citi cut its 12-month Bitcoin price target to $82,000 from $112,000, citing negative crypto ETF flows and uncertainty surrounding the Clarity Act.
JPMorgan emphasized the importance of adding strong safeguards to crypto market structure legislation in a company blog post.
U.S. consumer sentiment rose in June, helped by moderating oil prices.
Robinhood launched Robinhood Chain, enabling tokenized stock trading in more than 120 countries.
Ethereum Institutional, a new nonprofit backed by BitMine, SharpLink and Ethereum co-founder Joe Lubin, has launched to accelerate institutional adoption of Ethereum.
President Trump’s financial disclosure shows he holds more than $50 million in Bitcoin and Ethereum and reported over $635 million in royalties tied to the TRUMP meme coin. World Liberty Financial generated more than $500 million from token sales and related transactions.
Open Standard announced Open USD (OUSD), a stablecoin launching with support from more than 140 partners, including Visa, Stripe, Mastercard, BlackRock, Google and Coinbase, aiming to compete with Circle and Tether.
Ripple proposed the XRPL Lending Protocol, which would let institutions borrow against tokenized assets onchain.
BNY expanded its relationship with Circle, making USDC the first stablecoin available on the bank’s Digital Asset Custody platform.
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