Building in a Bear
Hello dear reader, and welcome to another Crypto Decrypted. If you’ve been with me a while you are familiar with some common themes. The Demand Wave that is coming. The Institutional readiness that is being put in place. The evolution of blockchain technology that will shape our world. The foundation and fundamentals. One thing I tend not to do is discuss price because, well, price is the booby prize. We’re looking for the bricks that are building this new sector.
Having said that, when our venerable Bitcoin drops 20% in a month, I certainly can’t ignore it. June was *oof* quite a drop. Not quite as bad as the US Soccer team completely folding to Belgium in the World Cup, but pretty darn bad. So then, let’s start by looking at some of the reasons for this month of pain but, as always, don’t lose sight of the forest for the trees. Something amazing is being built here that will shape us for generations and this is the core to everything we are looking at. Having said that…
Bitcoin Backslide
As noted above, Bitcoin was down roughly 20.5% on the month, marking the largest monthly downdraft in the last four years. Not to be outdone Ethereum plummeted as well and gave us it’s third red quarter in a row. Yup. It’s bear territory for sure. I see a few things that precipitated this. Things were honestly looking pretty good in May, however in June the makeshift US/Iran ceasefire strained, and a strained ceasefire began to stress these markets. That alone was not enough however but coupled with a “no directional” Fed that held rates in June, Michael Saylor’s Strategy unprecedented selling 32 Bitcoin and ETFs with record outflows as other speculative assets take center stage (SpaceX anyone?), it created an environment for the sky to fall. And, it did.
Consider though, that markets are simply re-adjusting. I’ve been pointing to the institutional impact for a while now and it has never been clearer. With a record $75 billion raised via IPO, I personally think SpaceX sucked all of the financial oxygen out of the room. A part of that may well have been $4.5B in June ETF outflows ($3.55B from iBIT alone). Then we had Michael Saylor’s Strategy breaking its “Never Sell” mantra by selling 32 Bitcoin (which was also weird, however, because the next week Strategy went and bought back 1,550 Bitcoin to the tune of $101.3 million.) Saylor said he was “inoculating” the markets. What he did was scare the heck out of them. Emotion drives action, markets fell and so it is. Then, surprise, surprise, I guess they stabilized, didn’t they.
Yes, BTC began July at roughly$60K. Could it go lower? Sure. Could it rebound? Sure. Do we know? Not yet. What I can say here is a few things. First off, there was no crypto-specific event. No FTX, no depeg, no protocol breaks. This leads me to conclude that, truly, the institutions have taken over these markets. And, it makes sense because that’s where the big money is. And I’m OK with this. It also means that we’re in a period of market adjustment. Let’s dive a little deeper.
Strategy’s New Strategy
After the 32 BTC selloff apparently shook out everyone and their kid brother Strategy, on June 29, announced their “Digital Credit Capital Framework.” The driver for this was mNAV, (Strategy’s ratio of enterprise value to Bitcoin holdings), which dropped below 1 for the first time. In English, this basically means the markets stopped valuing Strategy as a premium to Bitcoin and started discounting it. Not good. Hence, Strategy’s refined strategy which authorizes the selling of up to $1.25B in BTC while also authorizing $2B in buybacks while simultaneously increasing STRC’s dividend to 12%. The net-net is I imagine Saylor & Co thinking, “hey, let’s ensure we don’t implode under the weight of our Bitcoin stacks.”
Markets were concerned before this and that concern was growing. I mean, if the largest Bitcoin holder in the world goes belly up what happens? Dante’s 8th circle perhaps? Consider however that now the largest Bitcoin holder in the world just created a mechanism to manage their balance sheet a little more appropriately. And you know what happened? STRC not only held its ground it went up. Bitcoin which was flirting with $58K went up to $60K and is trending higher in early July I take this to mean that Wall Street likes this. It’s responsible. It’s not “buy and hold and hope.” My view? It does NOT signify a lack of conviction. Instead, it’s perhaps for the first time really sound financial planning. So, like Wall Street, I applaud Saylor for stepping up and doing what needed to be done. No more blind faith. Proper structure for long term success. I see this as a good thing.
Stablecoin, Stablecompetition
Meanwhile, while everyone was watching price, the payments infrastructure game heated up like crazy. Open USD was launched as a new stablecoin via a consortium of over 140 firms including Visa, Stripe, BlackRock & Master Card and, well, many more. It’s the “bank-owned stablecoin” and yes, it completely rattled Circle, creator of USDC and up until this basically the only stablecoin game in town, whose stock plummeted 17% on the news. Yes, I know that Trump’s World Liberty Financial has USD1 but, honestly, USDC is the gorilla. Or, gee, maybe was the gorilla. As if that’s not enough JP Morgan, BofA, Citibank, Wells Fargo launched a separate competing initiative run through The Clearing House, which is confusingly known as the “bank-owned alternative” to Open USD. Whew. We’ll have to see how this plays out as these new entrants are targeting by the end of this year. We’ll see who wins this next war but what’s important here is that Stablecoins are clearly the rails that will drive everything in the future. Don’t take my word for it. Take the word of the two groups above that are now joining Circle in a three-way power play. Now, for any of this to really to happen we need something else… regulatory clarity.
Regulatory Roundup
This advent of the Stablecoin revolution is seemingly in anticipation of our legislative efforts that are underway. First, let’s look at the Genius Act which was signed into Law on July 18, 2025. This legislation gave a year for federal agencies to finalize the rules that will make stablecoin governance work. With that deadline on July 18, 2026, there’s been a flurry of activity much like a college senior cramming for that test the night before. At a very high-level here’s where we are: The statute basically says that stablecoin issuers must hold 1:1 reserves, cannot pay yield and must meet certain capital requirements. That’s the “what”. It doesn’t say “how” that is going to happen.
The how, is drafted by each agency. Specifically, the OCC, FDIC, Fed and NCUA draft, then publish their proposed “how. ” They then all review, make comments and suggestions and, in a perfect world, have this all done, cleaned up, agreed upon and locked by July 18th. This is important because until this is done everything is still a little bit up in the air for Circle’s USDC, The Open USD consortium, the “Bank Owned Alternative” and, really, any entity that issues a stable coin. We’ll see if this deadline gets hit. If it doesn’t, all is not lost, I suspect this will just drag on a little longer and we will continue to the malaise of markets until we have the final rules of the road. Ultimately, January 18, 2027 is when everything goes into effect so that’s the hard date. I see this as the scaffolding that everyone is looking at and, given how important stablecoins are, could well be the next trampoline to launch the next market cycle.
Importantly, while Genius really focuses on stablecoins the big market umbrella is the Clarity Act, which provides regulatory guidance and rulebook for Bitcoin, Ethereum, Solana and… well… basically everything else. Think of it like this. Genius is the plumbing for how dollars move on chain. Clarity is the plumbing for how other crypto assets are legally defined, regulated and traded and how everything else gets on chain. For a mature market that can grow again we need both. Due to timeline compression this act has until the first week of August to get put into place or, general consensus is, that it’s probably off the table until 2027 at the earliest given upcoming midterms. With Galaxy Research suggesting odds sitting at roughly 50%, Clarity’s confirmation is, dare I say it, unclear. Now, I will say that from my purview given the huge gravity provided by Wall Street there is real impetus to get this done, so I personally think the odds are better than 50%. But there is one key thing that is in the way which is… ethics.
Trump Trumped
Trump ran on being the crypto champion. I think what we all didn’t understand was that he must have meant “I will champion this asset for my benefit.” That’s my view in any case and it seems that everyone else figured this out too via his jaw dropping disclosure that his crypto ventures have produced $1.4B in 2025 for his Trumpire. *SIGH*. I say this is why Clarity is really stalled. Ethics. Democrats point to the fact that we need some kind of provision that prevents those in higher office from using said office to their advantage, resolving the are you kidding me obvious conflict of interest. Republicans argue that we need broader language that is not specific to the president and that ethics language needs to be in a much broader bill.
All I know is this. It’s a hell of a grift. And the unfortunate part is I think it is taking away from the really great work and possibilities that exist from the proper, regulated use of crypto assets. Yes, I do think we should have ethics provisions. But no, I don’t think we should punish all other businesses and the whole industry because of a problem that is as old as our country itself. I mean, Trump is not the first executive or civil servant to use the office to his advantage. Nancy Pelosi entered office with a portfolio worth conservatively $610,000 - $785,000, and over the last few decades her husband Paul has “coincidentally” turned that into $130 Million. Gee, what a coincidence. Somehow the Pelosi’s have been able to miraculously make well timed trades just ahead of relevant regulatory action, such as buying Alphabet call options a week before an antitrust vote or buying Microsoft shares before a $22B army contract announcement. Hmmm. If it walks like a duck and quacks like a duck….
And this is just one example. We can talk about former Vice President Dick Chaney’s Halliburton conflict of interest where he profited greatly from a war he helped start, or Lyndon B. Johnson’s KTBC broadcasting station which, as biographer Robert Caro put it had a “twenty-year long streak of strikingly favorable rulings”. Conflicts of interests exist. They have existed. And until we have real reform, they will continue to exist. Do I think we need real reform? Heck yes. Martha Stewart went to jail for making false statements in regards to her sale of ImClone systems stock, yet our elected officials seem to just fly over the top unscathed trading willy-nilly. So, yes, I do think it needs to be across the board. That being said, the most salient point that I am making is that, for the moment, it seems the crypto president’s crypto profits are holding back the whole crypto industry.
Ok, ok, rant over.
Here’s what you need to know and where we are: The July 4th signing target is dead, we have roughly a month before the August 7th recess, and we are 5 democratic votes shy for this thing to hit the 60 required votes to pass. Will it? Wont it? It’s hard to say. We went through many years of Gensler making the rules up as he went along and that wasn’t so great for the industry so I for one am absolutely holding my breath in anticipation for an 11th hour compromise. It seems to me that if we really are interested in being the crypto capital of the world, being innovators and leaders in technology, and promoting technology, we do need this. Stay tuned folks, as this is a cliffhanger.
blockchAIn: Billfolds for Bots
Last but certainly not least – the agents are coming! In my last blog I highlighted that Circle, Amazon and Google were entering the world of agent-to-agent commerce by creating wallets for agents. Now, the crypto-native world has joined in as well. On June 8th MetaMask launched “Agent Wallet” which is a self-custodied wallet allowing AI agents to execute swaps, perpetuals, staking and, really anything a human can do. Coinbase joined in with “Coinbase for Agents” on June 11th, which allows AI systems such as Claude and ChatGPT to directly connect to a Coinbase account and trade, just like a human. OKX, a large international exchange also joined in creating a marketplace where AI agents can work, negotiate and settle payments in stablecoins.
This is maybe boring at this point (my gosh he keeps talking about agent wallets!) but I need to stress to me this is the biggest fundamental shift we will ever see in finance. AI Agents conducting machine to machine (M2M) transactions. It will change the way we work, play, eat, invest… everything. And we are watching this infrastructure get created today. At some point I believe we’ll have a “ChatGPT like” event just like in 2023 the whole world when up and said holy moly, AI is here! Except this time it will be “Holy Moly! AI is doing business with other AI and its happening everywhere!” This “AI M2M” event will be here pretty soon here folks, so my whole point in putting this down is so that you are not surprised when it happens. As noted above It is happening now. We just don’t tend to see it (unless, of course, you read Crypto: Decrypted!) As a final caveat, this is also why regulation is so important. To me the guardrails must be in place yesterday because this tech is advancing faster than anyone expected and, indeed, what we are seeing is that blockchain and AI are truly intertwined… and bots now have billfolds.
In Closing
Markets fell. Money moved. Regulators regulated. Companies collaborated. And through it all I hope you can continue to see the throughline. Everything, I mean everything is pointing to the creation of frameworks and functions that will drive the next cycle in this industry. The fundamentals are being put in place right now. Yeah, we’re in a bear. But it’s said that bears are for building, and building is what is happening right now. If you have made it this far then I hope you are looking at this a little differently and are more prepared for what is coming. Ignore price. Seek value. And watch out, because just like ChatGPT in 2023, the next AI event will be here before we know it. This time impacting the financial markets… and riding on crypto rails.
That’s all for now! Until next time be well, stay safe, and I’ll keep Decrypting Crypto for you!