Morgan Creek Capital CEO Mark Yusko said the CLARITY Act is “a horrible bill” written by big banks to delay the transition to better money, warning that if it passes, the crypto bear market could extend longer than expected.
The CLARITY Problem
Yusko told the Paul Barron Network that the CLARITY Act and GENIUS Act were written to forestall the inevitable transition to a system where people can be their own bank.
He pointed to Bank of America (NYSE:BAC) CEO Brian Moynihan saying the bank would “lose trillions of dollars of deposits” if people could earn yield elsewhere.
“They’ve said the quiet part out loud,” Yusko said. “If you don’t pay people for their capital and they can get paid somewhere else, they will move,” he added.
Yusko said he doesn’t understand how Senator Cynthia Lummis completely flipped from supporting Trump’s strategic Bitcoin (CRYPTO: BTC) reserve to backing the CLARITY Act.
He added that Coinbase (NASDAQ:COIN) CEO Brian Armstrong went from “public enemy number one in the Wall Street Journal to lobbying a little bit for CLARITY.”
If CLARITY Passes, Bear Market Extends
When asked if CLARITY not passing would crash crypto to new yearly lows, Yusko said the opposite is true.
“If CLARITY does pass, we probably extend the bear market longer,” he said.
Yusko added that if CLARITY doesn’t pass, instead of September or October marking the break into crypto spring, that timeline might advance.
The Retail Chase Myth
Yusko pushed back on claims that retail investors are chasing the stock market rally. He said options activity and single-day options are at all-time highs, but the average Robinhood (NASDAQ:HOOD) account is $4,000.
He said ownership remains heavily skewed. The top 10% control most assets, while the bottom 50% hold very little. That concentration means market direction is still set by wealthier investors, not retail flows.
He added that this group is leaning toward bonds rather than chasing equities, pointing to a more defensive stance.
Yusko also flagged gasoline prices as a risk. If fuel stays above $4 into the fall, it could weigh on voters and hurt incumbents in the midterm elections.
Bitcoin Outperforming Since War Started
Yusko noted that global money supply is on an extreme ramp, which is why Bitcoin has been the best performing asset since the Iran war started.
“Gold is actually down since the shooting started, and stocks are basically flat, bonds are basically flat, Bitcoin’s up,” he said.
Image: Shutterstock
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