To The Moon

Since February, $Bitcoin(BTC.USD.CC)$ has been on a downward trend from its phased high of $79,415, with its cumulative decline now approaching 19%.

Looking at a longer time frame, since reaching its all-time high of $126,000 in October last year, Bitcoin has been in a continuous decline for 5 months as of February this year.

The last time Bitcoin experienced a continuous decline for 5 months dates back to 2018; during that cycle, Bitcoin ultimately declined for 6 consecutive months, which was 8 years ago, or exactly two cycles ago.Looking further back in history, including this time, Bitcoin has only experienced consecutive declines for 5 months or more on 3 occasions: 5 consecutive months of decline in 2014, 6 consecutive months of decline in 2018, and as of now, it has already declined for 5 consecutive months this time.

Therefore, more and more people in the market believe that this round of decline may no longer be an ordinary correction, but rather a re-entry into the bear market in the sense of the "four-year cycle."

Those who support this view believe that Bitcoin's decline this time is not only significant in magnitude, but more crucially, its trend has already shown typical bear market characteristics: consecutive monthly declines, increasingly weak rebounds, and continuous cooling of market sentiment. Under this framework, what many people worry about is no longer just "how much further it can fall," but rather that if the bear market judgment of the four-year cycle holds true, this round of decline may have just begun, and the subsequent adjustment may continue for a long time.

At a time when community sentiment is generally pessimistic, a US crypto bill that could profoundly impact the landscape of the entire crypto industry is entering a critical stage of deliberation in the Senate. It is the CLARITY Act, with the full name Digital Asset Market Clarity Act. The core objective of this bill is to establish a clearer federal regulatory framework for the US cryptocurrency market: at the legal level, it aims to clarify the nature of tokens as much as possible, identify which are closer to securities and which are closer to commodities, while providing clearer registration and compliance paths for market participants such as trading platforms, brokers, and dealers; under this framework, Spot Market regulation will also tilt more towards the CFTC side. The House version was passed in July 2025 with 294 votes in favor and 134 against, but the bill's progress in the Senate has not been smooth. After several delays, the White House has set March 1 as the negotiation deadline, hoping that all parties can reach an agreement on the bill text before then.

Main Content and Current Controversies of the Act

The CLARITY Act is a bill that aims to establish an overall framework for US cryptocurrency regulation. Its core lies in clarifying many ambiguous areas in the industry's development from a legal perspective and providing clearer compliance boundaries and paths for practitioners and market participants.

Regulatory Boundary

The core layer of the CLARITY Act is to redefine the regulatory boundaries of the US cryptocurrency market. It aims to address an old problem that has persisted for many years: which tokens are closer to securities, which are closer to commodities, and who should primarily oversee the Spot Market. According to the version passed by the House of Representatives, the digital commodity Spot Market will fall more under the jurisdiction of the CFTC, while also establishing clearer federal registration paths for exchanges, brokers, and dealers. However, this does not mean that the SEC will withdraw from the scene. On the contrary, the SEC still retains a considerable amount of room for interpretation and enforcement, and many key definitions will continue to be refined by the SEC and CFTC later. That is to say, the bill is indeed "decentralizing power," but it does not clearly delineate the boundaries all at once.

US Stocks on the Blockchain

One of the most pressing real-world issues that the market is most concerned about is whether this bill will truly open the door to "putting US stocks on the blockchain." The answer is that it does not directly block this path, but it is far from opening it up. The focus of the CLARITY Act is still to establish rules for "digital commodities," rather than creating a low-threshold new channel for "on-chain securities." In other words, assets that are truly securities, even if moved onto the blockchain, will in essence still likely be handled according to the logic of securities.For platforms like Coinbase, Robinhood, and even Binance, which are advancing the narrative of on-chain stock trading, this means that the much-anticipated "regulatory green light" in the market has not emerged, at least for now.

DeFi Regulation

DeFi is one of the most controversial areas. Supporters hope that the bill will provide clearer legal boundaries for the industry, but opponents' greatest concern is whether the so-called "clarity" will ultimately result in gradually squeezing DeFi back into the framework of traditional finance. One important reason why the Senate discussions have repeatedly stalled originally included the disagreements surrounding Anti Money Laundering obligations and the responsibilities of DeFi platforms.To put it bluntly, what the DeFi community truly objects to is not the term "regulation" itself, but rather the concern that after roles such as frontends, interfaces, governance participants, and actual controllers are continuously incorporated into compliance responsibilities, DeFi in the US will increasingly resemble a "quasi-banking system" that requires KYC, cooperation with reviews, and assumption of licensing obligations.

Crypto Banking

From a directional perspective, the CLARITY Act is not actually "unleashing" cryptocurrency, but rather reintegrating it into the mainstream financial system. In the House version, a very clear signal is that digital commodity brokers, dealers, and exchanges that allow direct customer access will be included in the framework of "Financial Institutions" as defined by the Bank Secrecy Act. The logic behind this is clear - the US does not want a cryptocurrency world that has long been outside of financial regulation, but rather a compliant market that can be incorporated into the AML, KYC, auditing, and reporting systems. Supporters may feel that this is a prerequisite for institutional funds to truly enter the market; opponents, on the other hand, may feel that this is actually "banking" the most native and attractive traits of cryptocurrency step by step.

Stablecoin Interest Generation

One of the current real-world focal points that is most impeding the advancement of the bill is whether stablecoins can "earn interest." More precisely, this is mainly the core contradiction in the Senate's game: the banking industry hopes to restrict crypto companies from paying interest or interest-like returns to users simply because they hold stablecoins, as they are worried that this will directly divert bank deposits; the crypto industry, on the other hand, believes that if this avenue is blocked, the attractiveness of both stablecoins and trading platforms to users will significantly decline. The differences between the two sides are so great that even after the White House stepped in to mediate, the deadlock was not truly broken.For the market, the reason this matter is important is that it is no longer just a dispute over a clause, but rather a decision on whether stablecoins are more like "Payment Instruments" or will further evolve into "deposit-like products on the chain".

Impact of the Act on Different Cryptocurrencies

From the content of the bill, once the CLARITY Act is finally implemented, it may not necessarily lead to a synchronized increase across the entire industry, but is more likely to result in the first large-scale reclassification and pricing of crypto assets based on their compliance attributes.

BTC / ETH: Neutral with a Bullish Bias

For Bitcoin and Ethereum, the CLARITY Act is more about consolidating their positions than completely changing their fates. The direction of the Act is to delegate more of the core supervision of the digital commodity spot market to the CFTC, while excluding digital commodities and compliant payment stablecoins from the definition of securities. For assets like BTC and ETH, which are already closest to the consensus of "digital commodities", this will further reduce compliance concerns during institutional allocation, making them more likely to be formally incorporated into the mainstream asset system, rather than remaining in a state of "market default legality but still having gray areas in the system". They certainly benefit, but the marginal change may not necessarily be the largest across the entire market.

Public Chain / Infrastructure Tokens: Significant Positive News

Paradoxically, it is public chain and infrastructure tokens that are most likely to experience the greatest valuation recovery. The House version of the text contains several crucial designs: it clearly states that the digital goods sold in an investment contract are not equivalent to the investment contract itself; at the same time, it stipulates that the trading of digital goods originally issued in the form of an investment contract on the secondary market is no longer automatically considered part of the original investment contract transaction; further on, it also designs a certification path for "mature blockchain systems". This combination is very important because it effectively provides a path for a portion of functional tokens from "high regulatory risk assets" to "compliance-priced assets" in terms of institutional arrangements. For projects whose networks are already sufficiently decentralized and whose tokens are primarily used for gas, staking, settlement, or ecosystem circulation, this is the most favorable development closest to "revaluation of identity".

DeFi Leading Protocols: Neutral

DeFi is less likely to experience a uniform and across-the-board upswing; instead, it is more likely that the strong will become stronger while the weak will face pressure. On the one hand, the House version has left room for exemptions for some DeFi activities, including validating networks, providing blockchain front-end interfaces, releasing and updating software, developing wallets, etc., which indicates that the bill does not simply lump DeFi into the traditional licensing system. On the other hand, the anti-fraud and anti-manipulation powers of the SEC and CFTC remain intact, and one of the contentious points that has hindered the progress of the Senate bill originally included DeFi platform obligations and Anti Money Laundering requirements.The outcome will most likely be that leading DeFi projects that are more decentralized, strongly tied to protocol functionality, and less dependent on a single front-end are more likely to survive; while those projects with centralized front-ends, excessive control, and long-term operations in regulatory gray areas will face greater pressure in the future.

Stablecoin: Neutral

The direction of stablecoins is not simply positive or negative, but rather an enhancement of legality and pressure on profit margins. From the perspective of the House version, compliant payment stablecoins are explicitly excluded from the definition of securities, which in itself is a very important institutional confirmation, meaning they will be more clearly regarded as payment and settlement infrastructure. However, in the Senate negotiations, the most time-consuming issue is precisely "whether stablecoins can provide returns to users": the banking industry hopes to strictly control it, fearing the diversion of deposits; while the cryptocurrency industry insists that completely eliminating the return function will undermine the competitiveness of stablecoins and platforms. At the asset level, the position of compliant leading stablecoins is likely to be more stable, but the business models that rely on "yield narrative" to attract users will face greater uncertainty in the future.

Trading Platform / Custody / Compliance Intermediary: Significant Positive Impact

If we were to ask which category of "crypto asset-related targets" would benefit most directly, trading platforms, brokers, custodians, and other compliant intermediaries might actually be the most obvious group. The reason is simple: a core aspect of the CLARITY Act is to establish federal registration and regulatory pathways for digital commodity exchanges, brokers, and dealers, while also bringing relevant entities into the framework of financial institutions as defined by the Bank Secrecy Act. For small platforms, this means higher compliance costs; However, for leading platforms that originally intended to pursue the institutional route, this is precisely about transforming the most difficult regulatory hurdles of the past into a set of rules that can be invested in, implemented, and understood by capital markets. It will raise the industry threshold, but it will also enhance the scarcity of leading platforms.

Meme Coins / Long-Tail Speculative Assets: Neutral with a Bearish Bias

The bill itself may not directly target Meme coins or long-tail highly speculative assets, but they are likely to be at a disadvantage in terms of capital allocation. This is not because these assets will be immediately banned, but because once the market has clearer regulatory classifications and more explicit compliance channels, capital will naturally be more willing to flow towards assets that are easier to define and more acceptable to institutions. In the past, in the regulatory gray area, the differences among many assets were blurred; once the rules become clearer, the "quality gap" between assets will widen again. By then, the liquidity that is solely supported by sentiment and short-term speculation will often be the first to be withdrawn. This sector may not disappear immediately, but its relative position is likely to be weakened. This judgment is more based on the deduction of institutional repricing.

It should be noted that even if the bill is passed, it will not take effect immediately. A large number of key details still need to be formulated by the SEC and CFTC within 360 days after the bill takes effect. Therefore, in the short term, it is more likely to repair market sentiment rather than quickly change the fundamentals. Only in the long term, the passage and implementation of the bill will still constitute significant positive factors for the compliance and sustainable development of the entire industry.