Digital Assets insiders shared their thoughts on the CLARITY Act, Bitcoin, and Zcash this week.
CLARITY Act and stablecoins
“Stablecoins have been around for a long time. Using stablecoins for payments is increasingly important not only for the digital asset community but also for the mainstream financial system, because stablecoins are facilitating a growing amount of money movement.
“One important point in the current policy debate with the CLARITY Act is that the highly debated stablecoin yield issue in Washington is focused on payment stablecoins. Banks are now starting to consider how they can become involved, and the GENIUS Act already provides a strong framework for banks to collaborate with the digital asset community and with stablecoins more broadly.
“Compared with prior years, the conversation around regulation has shifted. Before, the focus was on uncertainty: whether regulation would come, what it would look like, and how it would affect the market. The biggest hurdle is now behind us.
“Today, the discussion is much more focused on innovation, real use cases, and how institutions can put stablecoins into practice. There is also much more attention on infrastructure, which reflects the fact that adoption is becoming real and the market is thinking seriously about scale.”
– Glendy Kam, chief product officer at Tassat
Bitcoin
“Bitcoin has lost more than half its value from the peak, which sounds dramatic until you remember that previous crypto winters routinely involved declines of 75% to 85%. This is a difficult period for the market, but by historical standards it remains relatively mild.”
“This isn’t a crisis of confidence in Bitcoin. It’s largely the result of a dramatic shift in interest-rate expectations from the US Federal Reserve and the extraordinary rise of AI and tech as the dominant destination for investment capital.”
“Only a few months ago, markets were focused on how quickly and how aggressively the Fed might cut interest rates. Today, investors are debating whether rates remain higher for longer and whether inflation could prove more persistent than many expected.
“Stronger economic data, sticky inflation and rising geopolitical tensions have forced investors to rethink assumptions that appeared widely accepted earlier in the year. When capital becomes more selective, speculative assets inevitably face greater scrutiny.
“The AI and tech boom has become a magnet for global capital. Investors are pouring money into the Big Tech Magnificent Seven, while companies such as OpenAI, Anthropic and SpaceX continue to attract enormous valuations, funding and attention. A growing pipeline of anticipated IPOs and AI-related opportunities is adding further fuel to the excitement.
“FOMO has not disappeared from markets; it’s moved. For much of the last decade, Bitcoin was one of the market’s defining fear-of-missing-out trades. Today, a significant portion of that excitement is being directed toward AI, tech and the next generation of transformational companies.
“Bitcoin is no longer competing only against other digital assets. It’s competing for attention, capital and enthusiasm against some of the most compelling growth stories in the world.
“Capital is finite. When investors see extraordinary opportunities in AI and tech, other growth assets inevitably face stronger competition.
“The strongest opportunities rarely emerge when optimism is universal, and prices are making fresh highs. They emerge when sentiment weakens, valuations become more attractive, and investors start questioning assets they were enthusiastically buying only months earlier.”
“Those moments have frequently gone on to become attractive entry points for patient investors with a longer time horizon.”
“The two biggest forces weighing on Bitcoin today are higher-for-longer interest-rate expectations and the immense gravitational pull of AI and tech. Investors who believe in the long-term role of digital assets should recognize that opportunities are rarely handed out when confidence is high.
“As such, periods like this are, typically, where future gains begin.”
– Nigel Green, CEO, deVere Group
“It’s macro, and it’s about liquidity. The biggest overhang is Japan. The Bank of Japan is expected to take rates to 1% next week, the highest in roughly three decades, and markets are already front-running it.
“That matters because cheap yen has funded risk assets globally for years. When that funding gets repriced, the carry trade unwinds, and the most volatile assets get sold first. We saw a preview of this in 2024.
“Layer on the Iran conflict, which keeps inflation sticky and pushes the Fed to stay tight, and you have a textbook risk-off setup. And here’s the thing people forget: Bitcoin is structurally more sensitive to this than almost any other asset. No earnings, no cash flows, 24/7 leverage – it’s the highest-beta expression of global liquidity.
“When the world gets chaotic, Bitcoin moves first and moves hardest, in both directions. A trait of Bitcoin we are already used to by this point.
“In the size of the move… this is just Bitcoin being Bitcoin. A 50% drawdown is within historical range; I’ve experienced this several times and saw it recover each time. A drawdown like this in a tightening, risk-off environment is exactly what you’d expect.
“What’s genuinely different is what’s not here. The brutal selloffs of 2022, Terra, FTX, and 3AC, were crypto-native solvency events, real blowups inside the system.
“This one has no failure at the center. Exchange liquidity has stayed strong, with decentralized exchanges now having real volume, and it’s reading as orderly repricing, not a structural break. The one thing I’d flag as new: equities and AI are near record highs while cryptocurrencies sell off (crypto companies are raising at new highs). That divergence is unusual and worth watching.
“The thesis was never that the price only goes up. It’s a fixed supply, no central issuer. None of that changed in the last six weeks.
“What changed is positioning and macro (exactly the kind of noise long-term holders are supposed to look through). The honest caveat: if your thesis was specifically ‘uncorrelated safe haven,’ this cycle tested that it sold off with risk-off, not against it.
“But the rails kept getting built right through the panic. The CFTC approved the first US-regulated bitcoin perpetual futures in late May (Kalshi, then Coinbase); Mastercard launched 24/7 on-chain settlement in early June. Companies like Lightning Labs, Tether, Lightspark and Trace Finance are building payments on top of Bitcoin and bringing real added utility.
“Infrastructure compounds even when the price doesn’t react. Real value is what will determine where this asset is in 10 years.”
– Bernardo Brites, CEO and co-founder of Trace Finance
Major banks to launch tokenized deposit network in 2027
“What’s notable about this announcement isn’t that major banks are embracing tokenized deposits, but how quickly the conversation has shifted from experimentation to implementation. Banks recognize the same benefits that have driven stablecoin adoption – real-time settlement, greater efficiency and 24/7 money movement – while also positioning themselves for the broader shift toward tokenized financial assets.
“What this signals is that traditional financial institutions are no longer viewing blockchain-based finance as something happening on the sidelines. Instead, they are moving to ensure they remain at the center of the next generation of financial infrastructure. The goal isn’t simply to control crypto and the world of stablecoins; it’s to play a leading role in how tokenized assets are issued, transferred and managed as adoption accelerates.
“Banks understand that if tokenized assets become a meaningful part of global finance, the institutions that successfully bridge traditional financial systems with blockchain technology will be best positioned to shape the market.
“In discussions with banks, payment providers and digital asset leaders at Improve 2026, there was broad agreement that the future of money movement will be defined by the convergence of traditional finance and blockchain infrastructure. The winners won’t be those with the flashiest technology, but those who solve the hard problems of regulation, identity and security while delivering a seamless experience for consumers and institutions alike.”
– Fernando Castellanos, global head of digital currency and sponsor banks at Prove
Zcash
“Zcash plunged around 50% in a single day after a June 4 report disclosed that a critical vulnerability had been discovered and subsequently fixed in the network’s privacy pool, Orchard. If exploited, the bug would have allowed an attacker to ‘undetectably create an unlimited amount of counterfeit ZEC’ that the network would have accepted as genuine.
“This would be particularly damaging for Zcash because, like Bitcoin, it is built around the idea of a fixed 21 million coin supply. The possibility that counterfeit tokens could have been created without leaving a visible on-chain signature directly challenged one of the core assumptions underpinning ZEC’s value.
“Following the disclosure, ZEC fell from around $558 to $264 before stabilizing slightly around $320. Despite the dramatic fall, ZEC has still outperformed both BTC and ETH since the beginning of May. Over that period, BTC fell around 20% and ETH around 28%, while ZEC rose around 33%, even after accounting for the crash. In fact, despite the large one-day drop, the token remained more than 500% above the sub-$50 levels at which it had traded exactly one year earlier.
“The vulnerability was identified during an AI-assisted audit of the Orchard circuit, using a custom framework running Anthropic’s newly released Opus 4.8. On May 29, one of the audit agents flagged the critical issue, despite earlier audits using Opus 4.7 having failed to find it. The fact that Opus 4.8 was able to surface the bug, even after Orchard had already passed in-depth human audits before launch, highlights the growing role AI can play in blockchain security.
“However, this also exposes a more bittersweet reality. AI was used proactively to defend the network and identify the vulnerability before it could be exploited, but the same tools can also be used offensively. As AI models become more capable, they will be increasingly used to audit protocols and search for weaknesses across smart contracts, cryptographic systems, and blockchain infrastructure.
“The crash also affected sentiment across the wider privacy-token sector, where privacy tokens such as Monero, Dash, and Horizen have all followed a similar trajectory to Zcash. This bug highlights the core trade-off of zero-knowledge systems: privacy protects users from public surveillance, but that same opacity can make exploits difficult to verify publicly, leaving users reliant on trust in the protocol’s security.”
– Thahbib Rahman, research analyst at Block Scholes