Grayscale pushes back on 80% crash calls, warns on CLARITY stall

Grayscale pushed back against predictions of an 80% Bitcoin crash but warned the asset's floor depends on the CLARITY Act's passage and the Fed's rate path.

Grayscale warned Bitcoin's floor depends on the stalled CLARITY Act, Fed rate hikes and digital asset trust deleveraging, pushing back on 80% crash calls.

"While we disagree with the most extreme downside scenarios, the path to a bottom is not guaranteed," Grayscale said in a research note published June 29. "It depends on legislative progress, monetary policy and trust market dynamics."

The CLARITY Act, which would establish a federal framework for digital asset classification, has stalled in Congress over disagreements on investor protections. The Federal Reserve under Chair Kevin Warsh held rates steady at its June meeting while raising inflation forecasts, with fed funds futures pricing out cuts through year-end, according to CME data. Digital asset trusts have faced redemption pressure as Bitcoin's correction deepened.

The combination of stalled legislation, tighter monetary policy and trust deleveraging creates what Grayscale described as a "trifecta of downward pressure" for Bitcoin. The next key tests come July 15, the comment deadline on the CLARITY Act, and the Fed's July 29-30 meeting, where another rate hold could extend the bearish backdrop.

The CLARITY Act's Legislative Path

The CLARITY Act — formally the Clearing Legal Ambiguity and Regulatory Integrity for Tokenized Yield Act — would grant the Commodity Futures Trading Commission primary oversight of digital asset spot markets while defining which tokens qualify as commodities versus securities. Industry lobbyists had viewed the bill as the most likely vehicle for regulatory clarity in 2026, but it has faced opposition from both parties over provisions related to stablecoin oversight and exchange registration requirements. A breakthrough before the August recess would require bipartisan agreement on amendments that have divided the House Financial Services Committee since April.

Fed Policy and the Macro Overhang

The Federal Reserve's June decision to hold rates at 5.25%-5.5% marked the 10th consecutive meeting without a cut, and Chair Warsh signaled the central bank needs "greater confidence" that inflation is sustainably moving toward 2% before easing. The personal consumption expenditures price index, the Fed's preferred inflation gauge, came in at 2.9% in May, above the 2.7% consensus estimate, according to Bureau of Economic Analysis data. Higher-for-longer rates reduce the appeal of risk assets including cryptocurrencies, which have historically correlated with global liquidity conditions.

Digital Asset Trust Deleveraging

Grayscale's own Bitcoin Trust and other digital asset vehicles have experienced net outflows as the correction accelerated, with investors redeeming shares at discounts to net asset value. The trust structure, which allows institutional exposure without direct custody, has historically amplified price moves during both rallies and selloffs as arbitrageurs trade the NAV premium or discount. Trust volumes have declined roughly 35% from the first-quarter average, according to CoinDesk data.

For Bitcoin, the path forward depends on which of these three pressures eases first. A CLARITY Act breakthrough could trigger institutional inflows by resolving classification uncertainty, while a Fed pivot would restore risk appetite. Without either, Grayscale's analysis suggests the current correction could extend further before finding a durable floor.

This article is for informational purposes only and does not constitute investment advice.