tl;dr
If you are getting excited about the latest developments around the CLARITY Act, don’t. Algorithmic stablecoins are anything but.
Market Snap
Market Wrap
Six consecutive days of inflows into the spot BTC ETFs is nice, though the magnitude remains modest.
Curious Cryptos’ Commentary – The CLARITY Act
Eleanor Terrett caused a bit of a stir with this post late on Monday:
The key problem facing the CLARITY Act is the inclusion and wording of an ethics provision. The issue, however honourable it may be, has been weaponised by some. I am sure you know who.
My scepticism about the proposed ethics language was reinforced by a White House comment that if the bill’s blockers did not accept it, that would prove they were not serious about their stated intentions. Demanding approval of an unseen text is a strange negotiating tactic.
But things have moved on. Although the wording of the proposed ethics provision has not been released to the public, Eleanor now reports that bipartisan negotiations over the text are underway. Polymarket responded with the probability of the Act being signed into law in 2026 rising from just over 30% to above 50%. That probability has now retreated to around 41%.
I remain wedded to my view that it isn’t going to happen, but I would be delighted to be proved wrong.
…
The CCC has long been an arch critic of the adherents to technical analysis - aka snake oil.
Our position has been fortified by a comment made by a leading advocate of TA, who is also co-founder and CIO of one or more hedge funds. The basic premise of TA is that all relevant information is in the price, allowing for predictions of future price movements. That clearly cannot be true, and it is certainly not true of information that is not yet available because it relates to future events.
This techie started with this observation:
“The reason that prices are running upwards (in BTC) are entirely dedicated towards the potential approval of the Clarity Act.”
Up to a point – “entirely” is a stretch. He then makes a startling and ridiculous claim that should destroy the credibility of TA for everyone for evermore:
“Things are brighter and brighter, and as the charts technically look incredible from here, it looks likely that we’ll see the Clarity Act being approved shortly.”
Claiming that the “charts” of a specific asset that is affected by a vast number of variables can predict a specific future political event speaks to madness.
Curious Cryptos’ Commentary – Algorithmic stablecoins
Another one bites the dust:
Balance Coin, an algorithmic stablecoin that was supposed to maintain a one‑dollar peg, has crashed more than 99% following a reported exploit of its governing DAO, offering yet another reminder why, in my opinion, you should never put any faith in an algorithmic stablecoin.