Market Signal: Crypto Shrugs Off Bad News

Chart of the Day — Household wealth in stocks.
Trade of the Day — Shorts open on TSLA.
Alpha Leaks — New blockchain Arc goes live.
News Roundup — Rate hikes, Clarity Act vote results, Robinhood Stock Tokens.

Stocks the Prime Asset for Household Wealth

One of the ways that investing has changed is simply in its accessibility. Retail is taking a larger and larger share of the market, you can trade instantly from an app in your pocket, and wealth preservation is a growing concern for everyone when currency debasement is increasingly obvious.

All this is reflected in this chart from Investopedia, showing that the share of household assets invested in stocks is at record levels of around 32%. This is a higher share than real estate ever reached–the peak for that sector was around 31% at the height of the housing bubble in 2005–and innovations around tokenization and extended trading look likely to favour equities in future.

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After having broken down bearishly below an extended triangle shape, TSLA looks now as if the bottom of that triangle is acting as resistance, which supports the technical case for another downside move from here.

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Rate Hikes Are In, Crypto Rallies

As was widely expected, the Fed yesterday announced that it is increasing rates by 25 bps to 3.75%-4%. This was a unanimous vote, and 16 out of 18 Fed officials foresee another hike in 2026, while only 4 officials project that rates will be below 4% at the end of 2027.

Additionally, Fed Chair Kevin Warsh’s remark that the Fed is “removing a dose of accomodation” suggests that there is still further “accomodation” to be removed, or in other words, there is room to tighten more.

However, market reaction to news and events is what matters for traders and investors, and what’s striking right now is how well crypto is holding up. BTC is back above 76K, and several tokens–including ZEC, LIT, and NEAR, among others–are rallying strongly.

Keep in mind that this price action also comes immediately after the Clarity Act failed to pass its latest Senate vote (more on that in the next story), creating a double whammy of nominally bad news. Another way of looking at this though, is that a double overhang of bad news has been cleared, it was priced in anyway, and crypto can now carry on as usual with those volatility triggers removed.

Clarity Act Blocked

Just prior to the latest Clarity Act vote in the US Senate, Senator Cynthis Lummis–lead sponsor of the bill–declared that it was “now or never” for the legislation, but we’ll have to hope that she was exaggerating about the never part, because the Clarity Act has failed to pass.

The legislation required 60 votes but only garnered 49, with 50 votes against. That opposition included all Democrats and four Republicans, as the issue has divided along party lines, with the Trump family's huge crypto profits–$1.4 billion from crypto-related enterprises over the past year–possibly galvanising Democrat opposition.

So what does this all mean for crypto from here?

Well, firstly, if Bitcoin had ever needed political support to thrive, then we wouldn’t even be talking about it now, and nothing has changed with regard to BTC’s long-term resilience.

But on top of that, both the CFTC and the SEC are now firmly pro-crypto, and CFTC Chair Michael Selig yesterday announced:

“The US is and will remain the crypto capital of the world. The CFTC is locked in and ready to ship its rules for the new frontier of finance”.

The messaging is similar to that of SEC Chair Paul Atkins, who, back in July, stated that if the Clarity Act stalled, then the SEC was “ready, willing, and able to come out with rules”, and Atkins yesterday posted, with reference to the voting result:

“With or without legislation, we will act decisively within the SEC’s statutory authority to deliver certainty for American investors and for the entrepreneurs shaping our technological future”.

Big Plans for Robinhood Chain Stock Tokens

Since it launched at the start of July, Robinhood Chain has been center-stage within crypto, garnering attention and onchain activity, and hitting a current TVL of $1.47 billion.

The network is especially focused on tokenized stocks, but there has been some confusion around how these assets actually work. Earlier this week though, senior Robinhood figures took steps to clarify the mechanics.

On Monday, CEO Vlad Tenev posted that “in-kind redemption and voting are coming for Robinhood Stock Tokens”.

This was a response to Johann Kerbrat, Senior Vice President and General Manager of Crypto and International at Robinhood, who had posted a longer explainer mentioning redemption and voting, and also stating that,

“All Robinhood Stock Tokens are backed 1:1 with real shares in secure custody. And Stock Tokens receive the economic equivalent of dividends and corporate actions returns reinvested into their holdings”.

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