Interest rates rise to a one-year high crushing CLARITY Act benefits: AI utility tokens may become true long-term winners.

Written by: @HeySorinAI

Translated by: AididiaoJP, Foresight News

The Senate Banking Committee has moved forward with the CLARITY Act for several days now. Crypto-related stocks (like Coinbase, Strategy, and Robinhood) surged 6-9% that day, but most of the gains were later reversed, and Bitcoin briefly touched $82,000 before sliding to $76,890. Here’s why the rebound faded so quickly, and what really drives prices currently.

Why the macro environment currently dominates

The CLARITY Act vote on May 14 triggered a sharp one-day rebound, followed by an equally sharp reversal on May 15. Bitcoin soared from $80,000 to $82,000 due to the vote, then slid down to its current price of $76,890. ETH peaked at $2,310, now reported at $2,118. Coinbase rose 9% on the day of the vote but retraced all gains the next day and fell another 2.8% overnight to $189. Strategy surged 8%, down 5.4% this week. Robinhood performed slightly better but still remained below the post-vote peak.

Net performance over the past 5 days: HOOD +0.1%, COIN -2.9%, BTC -4.5%, MSTR -5.4%, ETH -8%. Stocks performed slightly better than tokens, but the improvement was limited. The dominant story is: everything "peaked and retreated".

A major reason is the jump in 10-year Treasury yields to 4.59% on Friday, a one-year high, after CPI and PPI data earlier in the week came in above expectations. The S&P 500 index fell 1.24% from its historical high, the Nasdaq dropped 1.54%, and the VIX rose to 18.4. This trend overshadowed any regulatory benefits for crypto and related stocks.

Coinbase and Strategy are highly dependent on U.S. institutional funds, which tend to withdraw during tightening financial conditions. Bitcoin relies on dollar liquidity, which shrinks when real yields (returns adjusted for inflation) rise. Moreover, crypto's volatility far exceeds that of most risk assets, thus when major stocks pull back, crypto often takes a harder hit. The CLARITY Act catalyst pushed in one direction while rising interest rates pushed in another, ultimately, interest rates won.

This price trend also indicates how the current market is pricing legislation. Sustained gains are likely to occur only as the bill gets closer to being signed into law, and even then, it must compete with the macro environment at that time.

AI utility tokens are the true long-term winners

Once the CLARITY Act becomes law, AI utility tokens are still the category most likely to see significant gains. The act will grant "digital commodity" status to those tokens associated with sufficiently decentralized networks, whose value comes from real network usage. Decentralized computing, agent networks, and verifiable models and data layers are the most apt fields.

However, "AI" has become a marketing label, its meaning is as crucial as the actual category. Many tokens are labeled AI with little real action behind them. Structural winners are those projects with usable products, tokens that offer real utility, and user support.

What to focus on next

The committee vote is just one of several hurdles the bill must pass. It still needs to be merged with a parallel version from the Senate Agriculture Committee, then pass with 60 votes in the full Senate out of 100. It also needs to be coordinated with the House version passed in July 2025, ultimately requiring the President's signature. Once signed, the SEC and CFTC will have 360 days to formulate specific rules. The White House aims for July 4, with Polymarket giving a 62-73% probability for passage in 2026.

• 10-year Treasury yield: Before pulling back from the current year-high of around 4.6%, any regulatory catalyst may be diluted by macro pressures. This is currently one of the most important variables in crypto pricing.
• Ethical compromise text: Democrats want to impose statutory restrictions on government officials holding crypto business interests. No agreement has been reached yet, and without compromise, the 60 votes needed for a full vote cannot be achieved.
• Polymarket odds: Above 80% means the full vote math is approaching; below 50% indicates the bill is in trouble before the Senate recess in August.
• Spot Bitcoin ETF fund flows: A net inflow of $131 million on Thursday reversed the previous net outflow of $863 million. If daily inflows exceed $300 million continuously, it would indicate that institutional funds are genuinely positioning based on regulatory arguments rather than merely trading on news headlines.