Why Crypto Keeps Going Up Anyway

The episode contrasted Donald Trump's preference for rates of 1% or lower with the FOMC's unanimous decision to raise the federal funds target to 3.75%–4%. Speakers offered competing interpretations of the Fed's conduct—political coordination versus genuine independence—with inflation remaining too high and persistent as the stated rationale for tighter policy.

Higher long-term borrowing costs were linked to both a 10-year Treasury yield above 5% and the possibility that infrastructure investment and AI data-center spending are raising the cost of capital. The discussion also presented Michael How's view that Treasury QE could be more supportive of Main Street than of Wall Street asset prices.

Although the Clarity Act fell 11 votes short of the required supermajority, the SEC and CFTC may still advance crypto rules through exemptive relief, no-action letters, registration pathways, Project Crypto, and rulemaking. Speakers said this route may improve regulatory certainty and could be more defensible against a future hostile administration, even though agency rules are less durable than legislation.

The SEC's innovation exemption was described as a pathway for genuinely one-to-one tokenized stocks—with actual shareholder rights—to trade on public, permissionless blockchains through KYC-enabled and whitelisted venues. Securitize's roughly 30% rally after the announcement reflected the market's preference for this regulated, onshore model over offshore products offering only economic exposure.

Crypto adoption was presented as extending beyond speculative trading: Near was cited for $30 billion in confidential cross-chain transactions and $70 million in total value locked, while S&P Global's acquisition of OpenZeppelin was characterized as evidence that smart-contract infrastructure handling $37 trillion in transferred value is becoming important to traditional finance.