The Current Market
Crypto is in a tough market right now, a weak tape. Best described as a "crypto winter" or bear market that is slowing things down. As a trading asset it has lost appeal: 7-day and 30-day volatility on crypto is actually lower than the S&P 500's, so it is not exciting to trade from a volatility standpoint. There were some recent inflows into Bitcoin and Ethereum.
Advisor Adoption Is the Missing Piece
One of the biggest trends is advisor adoption, which has not yet taken hold. Earlier this year Morgan Stanley (MS) launched a Bitcoin ETF, and a few weeks ago it launched a Solana ETF and an Ethereum ETF. Once advisor platforms approve Bitcoin, Ethereum, and Solana, expect a stronger bid.
What Turns Sentiment Around
Two things can turn the market around and push Bitcoin back toward 100,000. First, price action that moves up and to the right, getting people excited and afraid to miss out. This will not center on "frog coins" and other meme coins. It will be about protocols and tokens that bring real value to the market. Second, and more important, institutional adoption. That requires a clear regulatory or legislative framework that lets very large institutions invest heavily - with capital or with staff - so they are well positioned for the growth. Adoption is still very early and somewhat small.
Stablecoins and the Genius Act
When the Genius Act was approved, it set a clear legislative framework for how stablecoins can be used, and that market grew 10x. The stablecoin market is only at the beginning of being mass adopted by institutions.
The Clarity Act and the Regulatory Fallback
The Clarity Act aims to build a framework around crypto infrastructure - exchanges, brokerage, and the other pieces that need legislative or regulatory rules to give institutions the confidence to lean in. The Clarity Act does not look likely to pass in the near term. Some pointed to September 15th as a possible resume date, but passage then does not appear likely.
In the absence of a law from Congress, expect the SEC and CFTC to set rules on the regulation side instead of the legislative side. The SEC and CFTC will not want to block a legislative act and disappoint the people who employ them, so if no law comes, they will do rulemaking. Everyone wants to futureproof the market. A law would futureproof it best; regulatory rule sets are a good second option.
Tokenization as the Killer Application
Think of crypto like a disruptive technology such as the smartphone. People got excited about the first smartphone because it combined an MP3 player and a phone in one device, and no one complained it lacked GPS at the start. Crypto's equivalent breakthrough - its "Uber of the smartphone" - will be tokenization. Tokenization is a real-world use that gives issuers, like those listed on the New York Stock Exchange, big benefits: wide distribution, 24/7 trading, and better connection to their investors. That application is what pushes this disruptive technology forward.
Some of this is already happening in small bits. Bullish just tokenized its own stock, run by Tom Farley.
An earlier analogy compared crypto to the arrival of the internet - being cautious at first, like not buying pants online without trying them on. The market has since matured, shown by the arrival of multi-token ETFs. More public education is needed on what this will become.
