What Happens to Crypto if Nothing Passes by August?
passing the largest crypto law turned out to be the easy part, but defining who and what is supposed to implement that law, is now the elephant in the room
PROLOGUE
This is a giant month for Bitcoin & Crypto.
Washington is currently sitting on the most important crypto law ever written (CLARITY Act) and the clock runs out in just 3 weeks.
FORWARD
The CLARITY Act, i wrote about this a few years ago when it was becoming a real thing, read these before today:
Bitcoin’s Record-Breaking Surge to $112,000 and the Impact of U.S. Stablecoin Legislation
You know what’s crazy? I got into this space when Tether (Stablecoins) didn’t even exist. It was only Bitcoin, Ethereum and Litecoin as the big 3. I remember when Tether finally popped up, i saw it shoot to the #4 coin immediately, and i didnt understand how that was possible. Even new coins could never shoot like that…and then i understood. It was the …
Bretton Woods 2.0?
On July 14, 2025, the U.S. House of Representatives kicks off “Crypto Week,” a historic five-day sprint to debate three landmark bills: the CLARITY Act, the GENIUS Act, and the Anti-CBDC Surveillance State Act. This isn’t just legislative theater—it’s a high-stakes chess move in a global battle for economic and technological dominance.
The Birth of Offline Bitcoin
Today, we're unpacking Bitchat, the brainchild of Twitter co-founder and Bitcoin evangelist Jack Dorsey. Launched just days ago, this app isn't just a messaging tool—it's a seismic shift in how we think about digital currency.
The Paper Bitcoin Trail
In today’s letter, you are going to learn what “Paper Bitcoin” is, and, why its powerful to understand.
LETTER
What the CLARITY Act does is simple, even though the politics are not.
It decides, once and for all (supposedly), which government agency regulates which digital asset.
(I mean what does that even mean when the agencies themselves can’t magically understand blockchain enough to regulate it just because a simple law was passed, do they understand it? Can they define what regulation is for an autonomous blockchain ledger?
Probably only in the way that scammers pump meme coins and then call that “crypto”, id say that would be me giving a generous classification of their understanding.)
Bitcoin is not crypto, im becoming more of a maxi every day.
For ten years now, companies in this industry haven’t known whether they answer to the SEC or the CFTC, and that uncertainty (not tech, not demand) has been the biggest thing holding American crypto businesses back. The bill passed its Senate committee back in May with votes from both parties. It has been stuck ever since.
Why? Surely a mix of reasons but a big one seems to be: The President’s own money. I thought this may have been just like a silly hit piece or something but the numbers are there…
The government ethics office released President Trump’s financial disclosure on July 1, 2026. It showed roughly $1.4 billion in crypto related income in 2025, which is more than half of everything he earned.
Democrats are saying that they will not pass a law regulating an industry the President personally profits from unless the law also contains rules preventing officials from cashing in on the assets they oversee.
(Which is kind of funny, because we know Dems do it on a crazy degree just with stocks lmao. Who knows if that is even a good faith argument but thats kind of the sentiment rn.)
Republicans call that a poison pill which isn’t totally wrong either.
My take is that we should not give any agency control over a digital asset without barring those employees from cashing in, IN ANY WAY, on the assets they oversee. BUT,,,,, WE SHOULDNT EVEN BE GIVING THESE AGENCIES CONTROL OVER THE ASSETS AT ALL. To me, its just like, start a lightning network and use BTC, you dont need to be told what your business can accept? Sure it would be easier but why is it needed?
But, this is why neither side has moved.
This past week, the White House planned a meeting between the President and Senators to try to break the deadlock on exactly this section: which, is telling…
Betting markets now put the odds of the passing at about 31% and the Senate leaves for its August recess in roughly 3 weeks. After that, midterm campaigning takes over and the window closes, probably until 2027.
There are two quieter fights inside the same bill worth knowing about.
One is over DeFi: whether the people who merely write open source financial software must register with the government like brokerages do. To me, going after the literal devs who simply build something on top of a blockchain is ridiculous absolutely absurd and no one should actually follow that directive. You cannot wage a war on everything people create, its open source. If they get that wrong, devs will likely pack up.
The other is over stablecoin yield. Whether companies like Coinbase can keep paying interest like rewards on dollar backed tokens. That specific usury angle is Coinbases’s cash cow: worth over a billion dollars a year to them. (COINBASE IS TRASH AND IS QUITE LITERALLY THE OPPOSITE OF BITCOIN’s PROOF OF WORK CONSENSUS)
MEANWHILE, the last crypto law is quietly falling in the follow through.
Last year, Congress passed the GENIUS Act, the stablecoin law, and gave regulators exactly one year: Until July 18th, 2026 (two days ago) to write the FINAL rules…
They missed the deadline...haha
And, how on earth are you really going to start a war with open source by declaring a gov agency the head of regulation over a digital asset? Thats like saying all internet must be controlled by the gov, which, is not going to happen in any reality. (Imo its because they know they can’t just say, all ethereum is under “blank” control because blockchains do not care about borders, its just blatant overreach, how are you going to clearly define what coin is governed by what agency when the agencies themselves are probably still using 1960’s IBM COBOL?) It really is funny.
The proposals exist, the comment periods are still open, but the rules are not done.
Here is the lesson I’d underline twice: passing a law turned out to be the easy part. The agencies charged with implementing these laws are understaffed and behind, and if CLARITY passes, the same thing will happen to it unless Congress also funds the regulators it keeps assigning homework to.
Again highlighting, for the world to see, that Congress and gov do not understand the tech they so desperately want to “regulate”.
While Washington stalls, the market is telling its own story. Inflation came in much cooler than expected this week, the biggest monthly drop in index since 2020. Bitcoin ran from about $62,800 to $65,000 (insanely suppressed paper price btw so take with grain of salt).
The Bitcoin ETFs took in roughly $1.2 billion this week alone. I DO NOT BUY ETF TRASH.
Another super weird wrinkle to watch: gov wallets moved about $288 million of seized Bitcoin and Ether onto Coinbase this week…that kind of move is shady and normally precedes a sale. WHY is the gov moving digital assets to a private company? All while the CLARITY Act is loading??
This is an odd look when we just signaled to the world the importance of owning a strategic Bitcoin Reserve..
The next 3 weeks decide whether the United States gets crypto rules in 2026 or punts to 2027, but the fight is no longer about crypto at all…
Its about whether the law will include ethics RULES that apply to the people passing it.
What do you think?
God-Willing, see you at the next letter
GRACE & PEACE