Morning Minute is a daily newsletter authored by Tyler Warner. The views and analysis presented are solely his own and do not necessarily represent those of Decrypt. Additionally, check out our daily news show 'FOMO HOUR' that covers all major stories and market movements.
Good morning!
Here are the key updates for today:
- Major cryptocurrencies decline following the failed vote on the Clarity Act; BTC priced at $76.1k
- The Clarity Act fell short by 11 votes during the cloture vote, as all Democrats opposed it
- Payward, the parent company of Kraken, will introduce Hyperliquid perpetual contracts to the US market
- Circle has launched its Arc mainnet, featuring 100 operational protocols
- X has rolled out a Cashtag partner program, allowing trading tickers via centralized exchanges
🏛️ The Clarity Act Fails by 11 Votes
The Senate failed to advance the Clarity Act on Tuesday, with a vote of 49 to 50, falling short of the required 60 votes. Chief sponsor Cynthia Lummis had declared earlier in the day, "It’s over."
In the wake of this decision, Bitcoin dropped to $75,960, marking a 4% decrease and its lowest value since August 21. Ethereum fell by 5.4% to $2,401, Solana by 5.1% to $98.15, with XRP experiencing a 9.4% drop.
Last-minute negotiations fell apart just before the vote. Staff for Tim Scott ended discussions regarding ethics provisions in Thom Tillis’s office, leading to a vote without any resolution. Republicans had made concessions in the Sunday draft, incorporating state attorney general enforcement and divestment requirements that received Trump’s approval. However, Democrats argued that these changes would not meet the needs of the first family. A counterproposal was circulated by Warner just hours before the vote, but Susan Collins voted against it from the Republican side.
This vote was procedural, determining whether to consider the bill, not its final approval. Although there is still a chance for the bill to pass this year, time is running out. The Senate breaks for midterms in early October, and a Democratic majority in either chamber in November could complicate future efforts, reducing the odds of passage in 2026 to just 5% according to Polymarket.
In response, crypto lobbyists expressed their discontent. Stand With Crypto announced it would factor senators’ votes on the Clarity Act into their public ratings ahead of the November elections, with executive director Mason Lynaugh stating that the failure reflected a lack of leadership and promised increased voter turnout from crypto supporters.
Despite the defeat, many in the crypto industry argue that operationally, little will change. The CFTC has already been instructed to draft rules under its existing authority, and the SEC is moving forward with proposals allowing blockchains to function as official stock ownership records, with a roundtable on 24-hour trading scheduled for Thursday. Coinbase has applied to launch single-stock perpetual contracts domestically, and the CFTC has decided to dismiss a lawsuit from CME regarding perpetual contracts. All these developments have occurred in just three weeks without a formal statute.
So, where does this leave the industry? Essentially, it remains in the same position as before. Regulatory changes are anticipated through guidance from the CFTC and SEC, although they will not have the permanence of law. While legislation would have been preferable, the next two years may provide a favorable environment under a crypto-friendly CFTC and SEC. Any market selloff triggered by this outcome may be misguided, especially with the upcoming FOMC meeting and a possible rate hike that could unsettle markets…
🌎 Macro Crypto and Markets
- Major cryptocurrencies are down following the Clarity Act rejection; BTC -1% at $76.1k; ETH -3% at $2,410; SOL -3% at $98; HYPE steady at $78.6; ZEC +7% at $1,225
- Leading altcoins include ARB (+22%), ZEC (+7%), and VVV (+5%)
- Oil remains stable at $103; Gold is up by 1.4% at $4,390
- Stock futures are positive ahead of today’s FOMC meeting; DOW +0.2%, Nasdaq +0.5%
- Crypto equities declined sharply after the Clarity Act's failure; Coinbase dropped nearly 9%, Circle by 9.4%, Galaxy fell 8%, Gemini 7%, and miners saw declines between 3% and 5%
- Deutsche Bank is set to introduce institutional crypto custody later this year pending necessary approvals, allowing corporate clients to hold and trade Bitcoin, Ethereum, and selected stablecoins, with plans for tokenized instruments in the future
- X has launched its Cashtag Partner Program in the US, which adds a Trade button on ticker pages directing users to Coinbase, Kraken, Gemini, Interactive Brokers, or Moomoo, with trades executed on the respective partner platform
- The DOJ is pursuing the forfeiture of $61.2 million in USDT allegedly linked to illicit Iranian oil transactions, filed on September 14 in the Southern District of New York across 10 TRON addresses
- The ECB is inviting merchants to participate in its digital euro pilot, ahead of an anticipated rollout
- Kamino has appointed Yieldstreet co-founder Michael Weisz as CEO to spearhead its expansion into the US, placing a Wall Street veteran at the helm of Solana's largest lending protocol
- The House Ways and Means Committee is reviewing a 114-page crypto tax bill on Wednesday which includes a $10 de minimis exemption for network fees, extends wash-sale rules to digital assets, and taxes mining and staking rewards as regular income upon receipt
Corporate Treasuries & ETFs
- Bitcoin ETFs saw net outflows of $450M on Tuesday, while ETH ETFs experienced $142M in outflows
- DeFi Development Corp has established a $300 million ATM for CHAD, its preferred stock backed by 13% SOL, with holdings increasing by 55,491 SOL to approximately 2.39 million, and shares issued at or above the stated $10 amount
Meme Coin Tracker
- Meme coin leaders mostly declined; DOGE -3%, SHIB -6%, PEPE -3%, PENGU -3%, TRUMP -5%, SPX -3%
- Leaders from the Robinhood chain mostly fell; Pons -7% to $400M; AI -10% at $270M; Cashcat +1% at $157M; Orbio +170% and Delta +30% were among the top gainers
- Top movers on Solana included Paid (+200x), Eloncoin (+15x), and Allinu (+700%)
💰 Token, Airdrop & Protocol Tracker
- Circle launched Arc's mainnet on Wednesday with institutions like BlackRock, DTCC, ICE, Mastercard, and Visa among 11 block producers, on a chain where gas fees are paid in USDC and over 100 applications were launched at the outset
- Hyperliquid led on-chain protocols in revenue on Tuesday with $2.4M, followed by Pump at $1.62M and PONS at $1.04M
- Payward, Kraken’s parent company announced the introduction of permissioned Hyperliquid HIP-3* markets for US clients
- Zcash revealed a funding partnership with Ledger to integrate the new Zcash Ironwood pool into Ledger devices
🚚 NFT Market Updates
- NFT leaders remained relatively stable; Punks steady at 29.3 ETH, BAYC down by 1% to 6.75 ETH, Pudgy unchanged at 3.36 ETH
- Rare Friends Genesis (+140%) and Hashcats (+22%) were among the top gainers