Clarity Act stalls, but stablecoins and tokenization have green light: SharpLink CEO

How correlated would you say are cryptocurrencies to inflation expectations and the Fed hiking cycle right now? >> It it depends on the cycle and the sentiment. Uh in the past, Bitcoin was pretty uncorrelated to commodities, to bonds, and to stocks. More recently, it's been trading like a riskon asset, highly correlated to NASDAQ and QQQ. Ethereum uh as the second largest cryptocurrency is a little bit less correlated because its use case is not just a hedge and store of value. It is the future of where much of financial services is being built at a moment where we're at a moment of institutional adoption. Think of it as the new infrastructure. So a little bit less correlated to rates, but it changes based on sentiment. It's changed over the last decade significantly. Let's talk about uh the regulatory framework and is it clear of regulation and the clarity act that could lead to even wider adoption that's really the missing link right now and what would be then the catalyst for uh digital assets and cryptocurrencies to move significantly higher and for Bitcoin to uh retest 100,000. >> The two most important elements are a green light for stable coins and a green light of tokenization of assets. And right now in the US, even though the Clarity Act uh did not pass the closure vote, it actually has a green light on both. Uh the US last year passed the Genius Act regulating uh stable coins. The new rules will take effect in 2027. So the door is open. And a few days after the Clarity Act failed, the SEC issued something called the innovation exemption, allowing more and more participants to participate in tokenization of equities. So, US equities are about a $75 trillion market cap and there's now an open door to start tokenizing them and I think that will be the next asset class that we'll see onchain 24/7 after the initial tokenization push was largely on the liquid side in things like US treasuries. >> The inconvenient truth is that the president himself has crypto businesses. Has the Clarity Act gone far enough in addressing uh what is a conflict of interest at the highest levels? I >> I believe there were ethics provisions that most US senators could come around, but we're in a highly politicide politicized environment in the US. I do believe if it wasn't for the ethics issues, we would have seen >> Is that enough? >> Uh it isn't right now. So what's happening is the SEC and CFTC, the two primary regulators, are going to solve about 80% of what was in the Clarity Act through rulemaking and they're acting almost in unison for the first time in history. >> You can circle back to the Clarity Act. Joseph, do you feel it fundamentally has got teeth and can it prevent another blow up like FTX from happening? I think we have the investor protections, but the biggest risks in the market today are frankly North Korean hackers. There's a lot less fraud than you've seen, but the biggest risk to the crypto industry is new AI models, you know, in conjunction with people who are highly motivated to find not just bugs in systems, but actually social engineering. I do think over time we're going to have a new financial system. Korea is the biggest threat factor >> uh because they have motivation, they have talent and they have new AI models that are able to take the time and that is a huge industry for North Korea. I was just in Seoul and one of the biggest concerns from the National Assembly is that innovation is something they're looking to do, but they have neighbors up north who have a different motivation.