Welcome back. 👋 Each week we cut through the noise and explain what’s driving crypto. This week, the Clarity Act receives Senate bipartisan support, the new Fed Chair reveals he owns crypto, and people are gathering to watch people trade crypto in boxing studios.

- Validator Digital

Bitcoin held above $80,000 early in the week, then slid to $76,352 after a hot April CPI print at 3.8% caught markets offside. Ongoing tensions with China (tariffs) and Iran (energy prices) piled on, created price action late in the week.

With Fed rate cut hopes vanishing, spot Bitcoin ETFs posted $1.14 billion in outflows, and $670 million in leveraged longs got liquidated.

Up next, the Senate Banking and Agriculture committees merge their CLARITY Act versions before a floor vote expected in early June. Progress keeps Trump's July 4 signing target alive and likely pushes Bitcoin back toward the low $80s. If inflation stays hot, Bitcoin likely tests the low $70s first.

Base case is choppy until CLARITY Act progresses, the Iran War concludes, or China tensions fade.

What Happened
The Digital Asset Market Clarity Act cleared the Senate Banking Committee on May 14 in a 15-9 bipartisan vote, with Trump targeting July 4 for signing. The bill answers the three questions that have stalled US crypto for a decade: who regulates what, how a new token can legally launch, and what builders can do without registering with the government. The full Senate floor vote is the next hurdle, after which the House (which passed its own version 294-134 last July) will need to reconcile any differences before the bill reaches the President.

Why It Matters
Regulatory uncertainty has been the biggest barrier to institutional crypto adoption for nearly a decade. The CLARITY Act removes it, giving banks, funds, and asset managers defined rules to work with. The closest parallel is the GENIUS Act that Trump signed last July to regulate stablecoins. Shortly after, the total crypto market crossed $4 trillion, XRP set a new all time high on signing day, and Ethereum broke its 2021 record by late August.

The Bottom Line
If CLARITY gets signed in July, US banks, brokers, and asset managers will finally have a clear federal rulebook for crypto. Between GENIUS for stablecoins and CLARITY for everything else, the entire crypto market will operate under defined US law for the first time.

Kevin Warsh Confirmed as Federal Reserve Chair with Disclosed Crypto Holdings
Kevin Warsh replaced Jerome Powell as Federal Reserve Chair last week, becoming the first Fed chair to publicly own crypto. Powell was cautious on the industry for years; Warsh has openly supported it and has long argued the Fed should cut interest rates and regulate less, both moves that historically push more money into riskier investments like crypto.

Morgan Stanley and JPMorgan Sponsor Consensus 2026 for the First Time
Morgan Stanley and JPMorgan became first-time sponsors of Consensus, the crypto industry's largest annual conference, held last week. Two of Wall Street's biggest banks now publicly back the event, a sharp turn from years of keeping crypto at a distance.

White House Says a Strategic Bitcoin Reserve Announcement Is Weeks Away
The White House said an update on the U.S. Strategic Bitcoin Reserve is coming within weeks. The reserve currently holds about 328,000 BTC from seizures; the pending BITCOIN Act would let the Treasury start buying bitcoin on the open market and use it like gold and foreign currencies.

Meta Pays Creators in Stablecoins in Colombia and the Philippines
After YouTube rolled out PYUSD payouts to creators last December, Meta has begun paying creators in Colombia and the Philippines in USDC, a dollar pegged stablecoin. Both platforms are turning to stablecoins to cut the cost and delay of paying creators internationally.

Church Street Boxing Gym Hosts Live Crypto Trading Competitions
The WSJ reports that Church Street Boxing Gym in lower Manhattan is hosting live crypto trading competitions where traders buy and sell bitcoin, ether, and memecoins in esports style events, with prizes including $10,000 cash and a katana.

Bitcoin Up 23% in First 75 Days of U.S. Iran War, While Gold Drops 11%
Bitcoin gained 23% in the first 75 days of the U.S. Iran war, while gold fell 11% and the S&P 500 climbed 9%. Bitcoin was also the only major market open when the surprise strikes hit on a Saturday, letting it react in real time while stock and gold markets stayed closed.

The US has the biggest pile, but it didn't actually buy any of it. So who has?

El Salvador went first. In 2021, President Bukele made Bitcoin legal tender and started buying it for the national treasury. Five years in, the country holds about 7,500 BTC, all bought on the open market.

Bhutan took a different path: instead of buying, the kingdom mines Bitcoin with surplus hydropower. The government has quietly built up roughly 6,000 BTC without ever placing a market order.

Brazil, Japan, Poland, and Pakistan have all floated reserve proposals. None have acted. For most central banks, Bitcoin is still too volatile to put on a national balance sheet.

That changes if the US codifies its Strategic Bitcoin Reserve into law. But while governments deliberate, millions of regular people are already buying crypto every day. How that actually works is next.

Next Week: How Do People Actually Buy Crypto Today?
Last Week: What is the US Strategic Bitcoin Reserve?

What story from this week are you watching most closely? Hit reply and let us know.

See you next week,

Don’t speculate, validate.
- Validator Digital

Disclaimer: Individuals have unique circumstances, goals, and risk tolerances, so you should consult a certified investment professional and/or do your own diligence before making investment decisions. The author is not an investment advisor and may hold positions in the assets covered. Certified professionals can provide individualized investment advice tailored to your unique situation. This newsletter is for general educational purposes only, is not individualized, and as such should not be construed as investment advice.