On July 21, according to crypto journalist Eleanor Terrett citing sources, U.S. President Trump has agreed to include an ethics clause in the "CLARITY Act" (Cryptocurrency Market Structure Act). The White House has reached an agreement on the ethics provision of the "CLARITY Act," clearing the last major hurdle for this months-long tug-of-war cryptocurrency regulation legislation. The bill text is expected to be released on the same day at the earliest, but there may be a slight delay; as of the time of this report, the Democrats have not seen the specific text.
After the announcement, the probability on Polymarket of "Will the 'CLARITY Act' be signed into law in 2026?" rebounded to 43%. Research firm Galaxy Research had previously assessed its probability of passing within 2026 at roughly fifty-fifty.
Earlier, on July 16, during a meeting with Republican Senators Bernie Moreno and Cynthia Lummis and White House crypto advisor Patrick Witt, Trump did not reach an agreement on the spot. However, the agreement was sealed by the President himself on Monday night. The provision aims to restrict federal officials such as the President, Vice President, and Members of Congress from profiting from digital assets during their term, with the core controversy revolving around the Trump family's Meme token and World Liberty Financial. Financial documents revealed last month showed that Trump's crypto income amounted to approximately $1.4 billion, causing negotiations to once deadlock.
The Final Stretch Before August Recess
If the "CLARITY Act" is ultimately enacted, it will mark the first comprehensive federal regulation of the digital asset industry, clarifying the jurisdictional division between the SEC and CFTC.
The U.S. House of Representatives previously passed the bill with a bipartisan majority of 294-134 in 2025, and the Senate Banking Committee cleared it on May 14 this year with a vote of 15-9, currently stuck in final negotiations before a full Senate vote.
The bill text is expected to be released in the coming days, followed by a full Senate vote; the window only extends until the first week of August recess (the Senate will recess on August 7 and return on September 14), and if passed, it will need to go back to the House for reconsideration, text merging, etc., before finally reaching the President's desk for signing.
The Senate's balance of power tightened in mid-July. Republican Senator Lindsey Graham of South Carolina passed away from an aortic dissection on the night of July 11 after concluding a visit to Ukraine, at the age of 71, reducing the Republican seats in the Senate from 53 to 52.
According to the Associated Press, two days later, the state's governor, Henry McMaster, appointed Graham's sister, Darline Graham Nordone, to fill the seat. She was sworn in on July 14, promptly restoring the seat.
However, Republican Senator Mitch McConnell has been absent from voting since his hospitalization on June 14. As of July 12, he stated he was not yet ready to return to the Senate, and there has been no further update on his potential return.
Under the Senate's Rule 22 cloture procedure, if Mitch McConnell remains absent, a bill would need at least 8 Democratic votes in addition to the actual Republican presence to pass.
Prior to this, Trump urged the Senate to swiftly pass the "CLARITY Act" on Truth Social, stating it was to honor the late Senator Lindsey Graham. He emphasized that this action is also about preventing China from gaining dominance in the digital finance and artificial intelligence sectors.
The urgency of progress is evident even at the White House level. Crypto advisor Patrick Witt, who was scheduled to be on leave this week for mandatory Georgia Army National Guard training, has had the training postponed and will continue to drive legislation forward. Meanwhile, his deputy, Harry Jung, announced his resignation effective two weeks from now.
Is it the "One-Liner" or the "Elephant in the Room"?
The industry's lobbying stance is quite straightforward. Summer Mersinger, CEO of the Blockchain Association and former CFTC commissioner, stated on July 16 at the Injective Summit in Washington, D.C., that the core provisions of the bill "are very close to being settled, with only a few details left to iron out." She referred to ethical issues as the "elephant in the room," highlighting it as the current major obstacle.
She made a plea to Congress, saying, "Whatever decision you make on the ethics provisions, that's truly not our concern; that's politics, that's Congress, that's elected officials. But please do not let it derail all the hard work we've put into the other parts of the bill."
Coinbase's Vice Chair and former SEC official Ryan VanGrack was more straightforward in mid-July on CNBC, stating, "The CLARITY Act has reached a tipping point, and the momentum for passage is evident." Senate Majority Leader John Thune, on the other hand, offered a more cautious assessment, saying, "There is indeed a path to an agreement, but time is running out."
In essence, both statements convey the same meaning: We don't care how the ethics provision is written, just don't hold up other parts.
Main questioning comes mainly from the Democratic side, pointing directly to the insufficiency of the ethics provision itself. Senator Chris Murphy criticized the CLARITY Act on July 14th in a Facebook post, stating, "It is a bill supported by the crypto industry aimed at expanding its influence on the banking system and the broader economy," and explicitly demanded, "The bill must include a provision stating that the President and his family members may not issue cryptocurrency during their term, whether it is a meme token or a stablecoin... The ethics provision must cover the President and his immediate family members."
Senators Warren, Jack Reed, Chris Van Hollen, and others also made a joint statement in mid-July, stating that they "cannot support the current version of the CLARITY Act," citing the need for stronger consumer protection, stricter conflict of interest and ethics rules, and more safeguards against crypto fraud and market manipulation. Senator Mark Warner was blunt, saying, "I am very pessimistic about the progress."
Whales, ETFs, and Crypto Treasury Trends
On-Chain Whales: According to CryptoQuant data on July 20th, addresses holding between 1000 and 10,000 BTC saw a net increase of about 66,700 BTC in the past 60 days, marking the strongest buying spree since mid-February; meanwhile, medium-sized addresses holding between 100 and 1000 BTC sold about 77,800 BTC during the same period. Data provided by a Bitfinex analyst to CoinDesk shows that whale addresses collectively accumulated over 270,000 BTC, worth around $16.7 billion, in the first two weeks of July.
Spot ETFs: According to SoSoValue's weekly data, the U.S. Bitcoin spot ETF saw 8 consecutive weeks of net outflows starting from the week of May 15, with the most significant outflow occurring in the week of June 26 at $1.79 billion; it finally turned positive in the week of July 10 with a net inflow of $197 million and saw another net inflow of $75.67 million in the week of July 17.
Ethereum Spot ETF Movement Almost Synchronized: Both experienced net outflows for 8 consecutive weeks from May 15 to July 2, with net inflows on July 10 and 17, amounting to $84.42 million and $105 million, respectively.
Crypto Treasury: The Strategy fund's BTC holdings remain at around 844,000 BTC, with no Bitcoin purchases for two weeks. In mid-July, they raised $2.635 billion in cash through a new issuance, which was not immediately used to increase holdings but rather held as a buffer for preferred stock dividends and interest. Japanese listed company Metaplanet increased its BTC holdings by 2,823 BTC in the second quarter, raising its total holdings to 43,000 BTC, ranking third among publicly traded companies globally. Its subsidiary also secured a convertible bond financing of about $59.5 million on July 21, planning to continue buying.
BitMine increased its ETH holdings by 7,430 ETH last week, reaching a total of 5,777,468 ETH, approximately 4.8% of the total ETH supply, with 85% already staked, providing an annual staking reward of about $247 million. The company also repurchased around 5.5 million shares of common stock at an average price of $15.62 per share last week. Tom Lee mentioned that the buying pace has slowed down as a result, but the weekly accumulation has not stopped since initiating the reserve strategy on June 30, 2025.
Arthur Hayes: According to Ember Fund, BitMEX co-founder Arthur Hayes bought 1,293 ETH for 2.5 million USDC on July 15 at a price of $1,933 per ETH. On July 20, he again purchased ETH with 2.5 million USDC through FalconX and Cumberland OTC at $1,876 per ETH. The total expenditure for both transactions was 5 million USDC, acquiring 2,625.7 ETH at an average cost of $1,904 per ETH. Hayes previously mentioned that the AI sector is absorbing market liquidity, causing short-term pressure on BTC. However, once liquidity is replenished, there is still room for a rebound in the crypto market.
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