Mon, September 14, 2026 | 9:34PM ET

Clarity Concessions Improve Cloture Odds, Fed Hawkishness Leaves Room for a Dovish Surprise, STRC Nears Par

Sean Farrell ^AC

Head of Digital Asset Strategy

Clarity Concessions Improve Cloture Odds, Fed Hawkishness Leaves Room for a Dovish Surprise, STRC Nears Par

There was a meaningful development on the Clarity Act yesterday evening. Republicans released a draft that materially expands the prior ethics provisions, including broader restrictions on executive branch and congressional officials benefiting financially from digital assets. More importantly, the draft would allow state attorneys general to enforce those prohibitions, addressing one of the more significant Democratic objections to the prior framework, where enforcement was viewed as too dependent on the federal government.
The other major change concerns stablecoin yield and rewards. The latest language does not impose an outright prohibition or materially alter the existing Genius Act framework. Instead, it would allow the Treasury Secretary to determine whether stablecoin rewards are causing meaningful deposit flight from community banks. If that threshold is met, Treasury would then be directed to promulgate rules restricting stablecoin rewards. That appears designed to address concerns from both Democrats and some Republican holdouts without banning stablecoin yield outright.
On the surface, those concessions should improve the bill’s chances. The market initially agreed. Clarity passage odds on Polymarket moved from roughly 15% a few days ago to as high as ~35% today, while crypto generally held up well relative to broader risk assets. Late in the session, however, skeptical comments from Democrats and several Republicans pushed those odds back toward ~17%, nearly retracing the entire move. Crypto prices followed suit.

The key event tomorrow is the vote to proceed to a floor vote, not final passage. The bill needs 60 votes, with the vote scheduled for 2:15 PM. I remain skeptical that Clarity ultimately gets signed into law on the current timetable even if the procedural vote succeeds, but I think (1) 60 votes to proceed would result in a meaningful rally and a break of current range highs for the majors, and (2) the market setup is interesting because expectations remain quite low.
That creates what I view as a favorable near-term asymmetry. Most crypto-focused investors had effectively written Clarity down to zero prior to the latest concessions. A failed procedural vote would likely generate some downside, but with prediction markets already back near 17%, a meaningful portion of that outcome appears priced. Conversely, getting 60 votes would force the market to re-underwrite an outcome that very few investors currently expect and could create a considerably larger upside response.
The other major catalyst this week is Wednesday’s FOMC decision. At the time of recording, a 25 bp hike is priced at roughly 94%, with approximately 3.5 hikes embedded through June. In other words, the market has undergone a very aggressive hawkish repricing. Even if the Fed delivers the expected hike, there is room for the market reaction to be dovish if the dot plot or Chair Warsh’s commentary falls short of those expectations. That could create another favorable asymmetry for BTC, ETH, and broader crypto.

One additional development worth watching is STRC, which was an important source of incremental BTC demand earlier this year. Strategy disclosed that it did not issue common stock or purchase/sell BTC last week, while continuing to repurchase preferred securities. Meanwhile, STRC has traded back toward $99, its highest level since May and its strongest pre-ex-dividend close since before the June/July unwind.

The progression around recent ex-dividend dates has been steadily more constructive, with STRC moving closer to par each cycle. Tomorrow is another ex-dividend date, and if this trend continues, I think it is increasingly plausible that STRC reaches par over the next several weeks. That matters because a return to par would reopen Strategy’s ability to issue the preferred and potentially restore a source of relatively price-insensitive capital for BTC purchases. I would view that as a meaningful incremental demand catalyst into late September or, most likely, mid-October.

Portfolios

Tickers in this video: BTC -3.05% ETH -4.08% STRC

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