The Clarity margin is narrow because the bill enters the final straight away
Galaxy Digital lowered its estimate of the likelihood of the CLARITY Act passing in 2026 to just 10%. In May it estimated the probability of passage at 75%.
A number of political issues remain unresolved and the Senate has just 14 days in session after passing the bill before it reconvenes on September 14.
Unless an early move to advance the vote occurs as lawmakers return to Washington, “dominating essentially the entire work session will leave enough time to pass the Clarity Act.” wrote Head of Galaxy Research, Alex Thorne.
If the bill doesn’t pass, the SEC and CFTC plan to crack down on violations by issuing their own rules for the crypto market. The SEC had scheduled an open meeting Friday to unveil its “clear road rule” but then canceled it due to “an unforeseen scheduling issue.” The White House was unhappy that SEC fiddling with crypto rules could anger Democrats and undermine the delicate negotiations underway to pass clarity.
SEC Chair Paul Atkins, President Donald Trump and a series of big wigs from Coinbase, a16z, Ripple, Chainlink, NYSE and Nasdaq see Wednesday at the White House to discuss crypto regulation and explore ways to get the bill over the line.
The following day the US Commodity Futures Trading Commission’s Innovation Advisory Committee will meet to discuss regulation of crypto, AI and prediction markets.
Crypto companies want access to frontier AI cybersecurity capabilities as fears of further hacks grow
Cryptocurrency companies including Anchorage Digital, BitGo, Bitwise, Blockstream, Ledger and Trezor have requested Frontier Artificial Intelligence (AI) Labs to give Bitcoin developers early access to their most capable models.
An open letter published by the Bitcoin Policy Institute says that Bitcoin Core devs and other crypto developers are being blocked by fences in publicly available frontier systems, leaving them to rely on a less capable open-weight model.
“Without a dedicated access program, defenders may lack the tools they need to keep pace with the growing threats to the infrastructure they maintain.”
AI identified exploit threats became a key focus after $116 million was stolen from ColdCard hardware wallets. The Bitcoin Red Team later used AI to identify thousands of potential cybersecurity issues using open-source Chinese models.
New threats to hardware wallet owners have continued over the past few days, with over 50,000 users’ personal details leaked in two separate incidents. Trezor has reported a personal data breach affecting about 14,000 users through its shipping provider, ShipMonk. Users who purchased its products from the US, UK, Sweden, Colombia, Brazil, Italy and Portugal between May 10 and August 8 are now at high risk of a potential phishing attack using their personal information.
Cryptocurrency wallet provider SafePal is also there disclosure Its own data breach that saw unauthorized access to nearly 40,000 customers’ order information, including names, addresses and purchase data. It identified and removed more than 30 fraudulent websites and phishing links involved in the breach
The CFTC and states battle over who will regulate prediction markets like Kalshi and Polymarket
The US Commodity Futures Trading Commission (CFTC) has ordered the forecast market to ignore New York’s ban and continue operating normally.
CFTC said New York’s enforcement action against Kalshi for operating an illegal gambling business created a market emergency because it would prevent Kalshi from operating a nationwide prediction market. It believes the Commodity Exchange Act requires the CFTC to provide a uniform national derivatives market. CFTC Chair Michael Selig said Congress did not want derivatives exchanges to face a “patchwork of state gaming laws.”
Days later a Washington state judge ordered the prediction market platform Kalshi to cease operations in the state, rejecting arguments that federal commodity laws trump Washington gambling laws. Kalshi has been directed to implement IP-address and residency-based geofencing by August 19 and a Geo Compli multi-source geofencing system by September 2.
Even the New York City Council wants to regulate prediction markets and has launched an investigation into prediction market firms to examine whether they are using “false and deceptive marketing” through influencers to target young adults.
Ethereum Foundation Restructures Post-Quantum Plan and Narrows Scope of Hegotah Hard Fork
According to researcher Justin Drake, the Ethereum Foundation is moving away from the Poseidon hash function in its planned post-quantum architecture.
Thursday, Drake said Foundation will instead rely on established and battle tested alternatives like SHA or BLAKE.
Poseidon is a relatively new hash function designed to work better with zero-knowledge proofs, which should help compress large post-quantum signature sizes. However, Drake says the new development means SNARKS can be adapted to work better with existing hash functions.
A production-ready leanVM is targeted for 2027, followed by deployment across Ethereum’s consensus, data and execution layers in 2028.
Ethereum developers are reviewing 66 proposals to narrow them down as part of the scope for the next major Ethereum upgrade to follow the Glimmerdom called Hegota.
Anti-Censorship Proposal FOCIL is currently the only Ethereum Improvement Proposal (EIP) scheduled for inclusion. Many other EIPs focus on privacy.
Core developers aim to ship the Hegotá upgrade next year, while Glamsterdam is expected in the coming months
Tether completed the first full financial audit, receiving a clear KPMG opinion
Tether has finally completed its first fully independent audit of its annual financial statements, with KPMG delivering a clean opinion on the US stablecoin issuer’s 2025 accounts.
The audit includes Tether’s balance sheet, income statement and cash flows for the year ended December 31, 2025, the assets backing its issued tokens and the liabilities they represent. Tether said The audited statements showed that reserve liabilities exceeded $6.814 billion.
Unlike Tether’s quarterly reserve certifications, which it has released for years, the full audit subjects the company’s broader financial statements and underlying evidence to independent examination.
winners and losers
By week’s end, Bitcoin (BTC) was trading down 3.3% at $62,842, Ethereum (ETH) was trading down 2.3% at $1,872, and XRP (XRP) was down 4.2% at 99 cents. According to CoinMarketCap the total market cap is $2.16 trillion.
Among the 100 largest cryptocurrencies, the top three altcoin winners of the week were Velvet (VELVET), with a 131% gain, Ether.fi (ETHFI) 31% and Chainlink (LINK) 14%.
The top three altcoin losers for the week were Uniswap (UNI) down 18%, Aptos (APT) down 12% and Pepe (PEPE) down 11%.
Top forecast of the week
Bitcoin May Bottom in October, Altcoins ‘Basically Dead,’ Swan CEO Says
According to SwanBitcoin CEO Corey Klipsten, Bitcoin may bottom out in October before recovering to around $130,000 in 2028.
He argued that Bitcoin has bottomed about 12 months after the top of each previous bull market so far, and that the previous top was in October of last year.
He told Cointelegraph that Bitcoin could drop to $57,000 or even $53,000 before a quick recovery and reach around $130,000 before the 2028 halving.
Best FUD of the week
Bitcoin to reach $1M by 2030 ‘mathematically impossible’, says Marcus Thielen
According to Marcus Thielen, head of research at 10x Research, the numbers behind the oft-cited prediction that Bitcoin will hit $1 million by 2030 just don’t add up.
“It’s mathematically impossible,” Thielen told Trade Secrets, adding that Bitcoin would need to attract another $15 trillion in capital to reach $1 million per bitcoin. This is equivalent to roughly 25% of the total value of the US stock market flowing into Bitcoin over the next four years.
“We’ve seen $1 trillion inflows to really bring the market cap to $1 trillion. To $1 million (per) bitcoin. I think, it’s 15x from here.”
Bitcoin price-metric basket sees longest capitulation since FTX blow-up: Glassnode
Bitcoin is seeing its longest surrender since the end of the 2022 bear market, onchain analytics platform Glassnode reported on Monday.
The firm said it tracks forty-five bitcoin (BTC) price metrics under Bitcoin cycle position heatmap The end of 2022 shows the longest “capitulation” phase since the collapse of FTX. But it warned that the readings, consistent with areas marking previous bear-market bottoms, had to worsen, said producer Raphael Schultze-Kraft.
“Today it sits in the coldest stretch since FTX: near the end of the bears, but not yet the consensus deep blue that marked a bottom earlier,” he commented.
Missouri trio charged with conspiracy to extort bitcoins
Three Missouri men were indicted in an alleged conspiracy in August 2024 to kidnap a bitcoin holder and steal his holdings.
Cedric Lui, John Davis and Myrtle Williams were allegedly recruited to kidnap a Bitcoin holder and force him to transfer the cryptocurrency to accounts controlled by the organizers. Press release By the US Attorney’s Office. They traveled from St. Louis to Connecticut, where they rented cars and got air rifles to intercept the hunt.
After outing the intended target for two days, they abandon the plan for fear of being caught on home security cameras. Shortly thereafter, another crew arrived from Florida to execute the plan.
Top magazine feature of the week
Five years after El Salvador made bitcoin legal tender, the experiment fell short of its original promise for the locals, but it was great for bitcoin’s global profile.
Suspicious North Korean IT workers join a fake crypto startup – not realizing their every move is being tracked to extract valuable intel.
Solana’s proposed fee overhaul would make asset-heavy transactions more expensive while reducing costs for simpler operations and increase SOL burn.
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