September 15, Washington. The Senate held a procedural vote on the CLARITY Act.
The result was 49 in favor, 50 against. Ten votes short of the 60-vote threshold. The bill failed to enter formal consideration.
On the same day, news came from the direction of Tehran: the east-west oil pipeline in Saudi Arabia was attacked and shut down, and a ship in the Strait of Hormuz was hit and caught fire. Brent crude stood at $108.
Washington closed one door, while Tehran and Riyadh welded shut the windows.
First blow: regulation.
The CLARITY Act had been tossed around for months, with bipartisan negotiations and multiple revisions. What blocked it was not the technical details of crypto regulation, but the conflict of interest involving the Trump family's crypto business. Democrats wanted to add ethical clauses, Republicans said to push forward first and discuss later. It deadlocked.
Then came this vote. 49:50, it didn’t pass.
Coinbase CEO Armstrong tweeted heavily: "Congress can’t wait any longer." He said the SEC and CFTC have tools to set rules under existing authority and are expected to take serious action.
Ripple CEO Garlinghouse also spoke out, saying politely: "Even if the bill fails, crypto will not disappear."
But politeness aside, Congress is about to recess for the November midterm elections, leaving very limited room for the bill to be pushed again in the short term. On Polymarket, the probability of CLARITY becoming law has dropped to 5%.
Looking back five months later, what you thought was "regulatory uncertainty" today is actually the most certain thing for the next few years.
Second blow: macro.
The east-west oil pipeline in Saudi Arabia was shut down after an Iraqi drone attack. This pipeline transports 7 million barrels per day, bypassing the Strait of Hormuz, and is the most important buffer when Gulf shipping lanes are under pressure. Now it’s stopped. Riyadh has not given a restart timetable.
Brent crude jumped to $108. Bernstein analysts are already shouting: oil prices could surge to $120 to $150.
Then what?
US August CPI year-over-year was 3.4%, core CPI month-over-month 0.3%, higher than expected, marking the largest monthly increase since April. The energy index rose 2.1% month-over-month, with gasoline contributing more than one-third of the monthly CPI increase.
CME FedWatch: the probability of a 25 basis point rate hike in September is approaching 90%.
Goldman Sachs changed its forecast from "no change" to "rate hike in September." JPMorgan changed to one hike in September and one in December. HSBC also revised its forecast.
The market-priced federal funds rate will rise to 3.75%-4.00%. This is the first rate hike in this cycle.
Oil prices rose, inflation returned, the Fed is going to raise rates. Crypto liquidity will be drained one more layer.
After the CLARITY vote result was announced, BTC dropped from around 79,000 to below 75,500, with a 24-hour maximum drop of about $5,000. Over $300 million in long positions were liquidated. Coinbase shares fell over 9%, Circle over 12%.
The stock side fell two to three times more than the crypto side. Why? Because Coinbase and Circle’s valuations included a whole "regulatory dividend" expectation. CLARITY died, and that premium went straight to zero.
BTC doesn’t have that premium, so it fell the least.
But that doesn’t mean it’s fine. The real impact is yet to come—the rate hikes will land, risk assets will collectively come under pressure, and crypto will be no exception.
A deeper issue: institutions are waiting, but can’t wait any longer.
DTCC, together with BlackRock, Goldman Sachs, JPMorgan, and over 50 other institutions, is already conducting live trading of tokenized securities. Nasdaq has received SEC approval to pilot tokenized stock trading. Ripple Prime has also joined DTCC’s tokenization working group.
These institutions don’t need CLARITY to get on-chain. But they need CLARITY to launch products compliantly and at scale in the US.
What does the shelving of CLARITY mean? They can only detour overseas or wait for SEC case-by-case approvals. Entry speed will be at least six months to a year slower.
Meanwhile, Washington’s political energy will be completely absorbed by inflation and oil prices. As the Fed is forced to raise rates to combat energy inflation, crypto legislation’s priority will continue to fall.
The crypto industry is being abandoned simultaneously by Washington and Wall Street.
CLARITY is dead. Oil prices are up. The Fed is going to raise rates.
But precisely at such moments—
The real builders will stay.
Those who rushed in just because of regulatory expectations never belonged here.
$BTC$BZ$CL#中东能源风险推高油价
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