Welcome back. 👋 Each week we cut through the noise and explain what’s driving crypto. This week crypto makes its way from network upgrades to policy shifts…and even onto the burger counter.

- Validator Digital

Crypto prices bounced around all week, with sharp moves up and down but no clear direction sticking. Bitcoin ETFs saw net outflows, and that uncertainty showed up in price action as rallies faded quickly. The market stayed active, but conviction remained hard to find. For now, crypto remains in a waiting and sideways phase rather than a breakout.

What Happened
The CLARITY Act was expected to move forward around January 15, and while progress stalled in parts of the Senate, the Agriculture Committee did continue advancing its portion of the bill, signaling ongoing momentum on the CFTC side.

Why It Got Held Up
The main roadblock has been stablecoin yield rules. The latest draft would restrict or ban yield on stablecoins, limiting crypto platforms’ ability to offer interest-like returns that compete with bank deposits. Banks have pushed for this language, warning that high digital-dollar yields could pull away trillions in deposits, estimates run as high as $6 trillion, out of the traditional banking system.

That provision prompted Coinbase to withdraw its support for the bill, saying the restriction would undermine innovation and effectively protect banks’ revenue models at the expense of open finance.

What’s Next
Senate committees are now revising disputed language, with the Agriculture Committee moving ahead while banking and securities issues are renegotiated. Updated text is expected later this winter, with possible markups and a Senate vote later this spring if consensus holds.

Why It Matters
The delay doesn’t signal defeat — it reflects active negotiation. The CLARITY Act could still become the first comprehensive federal crypto statute, but its timeline has clearly shifted as lawmakers refine the most contentious provisions.

Ethereum Overtakes Bitcoin in New Address Growth
Ethereum is now onboarding more new addresses than Bitcoin, meaning more first-time participants are entering the ETH ecosystem. While BTC’s growth has stayed relatively flat, ETH’s acceleration reflects the impact of network upgrades and expanding use cases. The signal is clear: Ethereum’s network effects are compounding faster, making it the dominant player for new user adoption.

Blockchains are great at following rules, but they can’t see the outside world on their own. An oracle is the system that brings real-world information onto the blockchain so smart contracts and DAOs can act on it.

Think of an oracle like a trusted data feed. It reports information blockchains can’t access themselves — things like asset prices, market data, or the outcome of an event — and smart contracts use that data to decide what happens next.

For example, DeFi apps use oracles to know the current price of ETH or Bitcoin, lending platforms use them to decide when loans are safe or risky, and DAOs use them to manage treasuries and make financial decisions. Without oracles, none of these systems could function safely.

Well-known oracle networks like Chainlink and Pyth specialize in delivering this data reliably and securely. Oracles connect blockchains to the real world — and once that connection exists, fully on-chain financial systems become possible. That’s where DeFi comes in, next.

Next Week: What is DeFi?

Last Week: What is a DAO?

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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.