Crypto prices pushed higher in the third week of September even after two developments that would normally be read as clear headwinds: the U.S. Clarity Act failed to pass, and the Federal Reserve raised its federal funds target range for the first time since 2023.
In a Bankless podcast, hosts Ryan and David said that combination offered an unusually strong read on market behavior. Their discussion ranged from Bitcoin’s key price bands and the rebound in privacy-linked and “middle-market” tokens to Treasury yields, the latest Fed decision, the SEC’s new innovation exemption for tokenized stocks, DeFi options, Kraken’s compliant route into Hyperliquid, Venice AI token usage, Arc Chain’s launch, and S&P Global’s acquisition of OpenZeppelin.
Why the market looked stronger after two negative headlines
David said the past week delivered what he viewed as a strong early bull-market confirmation signal. In his telling, bull markets tend to absorb bad news with little damage, and that is what happened here: rates went up, the bill failed, and crypto either held firm or traded higher.
The episode also cited crypto investor Eric Conner, who said it felt notable to watch the market digest both negative developments on the same day. Ryan added that many traders never really believed the Clarity Act was certain to pass and that a rate hike had already been widely expected. He pointed to the muted reaction in the Nasdaq and the S&P as part of the same picture.
Bitcoin’s range: $69,900 to $80,400
The hosts referred to a framework from The DeFi Report founder Michael Nadeau for identifying an early bull market. Under that view, Bitcoin staying between $69,900 and $80,400 means the asset remains in a range where the larger trend is not yet fully resolved. The lower level corresponds to the 200-day moving average, while the upper level marks the 50-week moving average.
As long as Bitcoin does not break down through that zone, Nadeau’s framework would not classify the market as having rolled back into a bear phase. A move above $80,400, followed by several weeks of holding that level, would strengthen the case that early bull-market momentum has been confirmed.
David said his takeaway was simple: if the range holds, the market can still lean bullish, and the June 30 low may already have marked the bottom. Ryan said he wants to revisit the issue with Ben Cowen after Cowen returns from New Zealand, because Bitcoin has bounced around the 200-week moving average before and bear-market rallies can include a second test. If that happens again, Ryan said Bitcoin could revisit the $65,000 to $66,000 area, a move he thinks many participants on Crypto Twitter are not positioned for.
Zcash, NEAR, and signs of life in the market’s middle tier
Ryan said blue-chip crypto assets such as Bitcoin and Ether were not the main story this week. Instead, several altcoins posted sharp gains. Zcash moved above $1,500 to set a new high after trading near $1,200 the previous week.
He offered two possible explanations. One was sentiment-driven buying, with traders treating Zcash as a kind of privacy hedge for Bitcoin. The other was that the market interpreted the Fed hike as supportive and used Zcash as a higher-beta expression of that view. Ryan noted that this pattern looked unusual because earlier phases of bull markets have often started with Bitcoin leading and smaller tokens following later.
Hyperliquid also hit a record high, according to the episode. NEAR climbed to $3. While that is still well below its 2021 peak of $30, the hosts said the recent move has been strong. Ryan pointed to data recently released by NEAR on its privacy transaction feature, described as confidential intents: more than $30 billion in cross-chain transactions processed and total value locked of $70 million. In the discussion, NEAR’s price strength was tied both to broader market interest in privacy-related trading and to growth in the actual use of its core product.
David expanded the point into a broader market-structure argument. For some time, he said, crypto had been split between resilient blue chips on one end and high-heat meme coins on the other. That left the middle of the market badly drained. He described that layer as the part of the industry where startups, protocols, product teams, and BD staff tend to cluster.
What he sees now is a structural repair. Not every project in that middle layer will recover, but the ones with real products, real user adoption, and business models that can sustain them are attracting attention again. He added that privacy and perpetuals have emerged as core narratives in this cycle and were at least partially validated during the bear market. As sentiment improves, investors appear more willing to add exposure to the projects that already proved they could compete.
Q4 rebound talk, the bond market, and a 10-year yield above 5%
On macro, Ryan brought up Tom Lee’s view that the fourth quarter after the midterm elections could produce one of the biggest rallies of a lifetime and extend into next year. He said the S&P 500 was around 7,585 and that Tom Lee sees it ending the year comfortably above 8,200, led by the Magnificent Seven and software stocks. As long as the AI trade stays alive, Ryan said, Lee expects the market to move through the pullback and rebound strongly by year-end.
David joked that listening to that kind of outlook felt like psychological therapy for his wallet. Ryan then turned to a harder signal: the U.S. 10-year Treasury yield has climbed above 5%, a level not seen in quite some time. He also said Bessent at the Treasury bought $6 billion in long-dated bonds the previous week in an attempt to push yields lower, but the effort did not work.
David said people initially thought Bessent might be able to move the market, then realized how small that sum was relative to the size of the Treasury market. Ryan said he was still unsure how to read the surge in yields: whether it reflected concerns about dollar debasement, which would support gold and Bitcoin, or whether it pointed to an economy running too hot, with things like infrastructure and AI data-center investment pushing up the cost of capital.
David said the combination of strong growth, sticky inflation, and a hot bond market does not lend itself to a clean single interpretation.
Fed lifts rates to 3.75% to 4%, with a unanimous vote
The episode said the Federal Reserve raised its target range to 3.75% to 4%, with all 12 members voting in favor. Ryan said Fed Chair Warsh, who was nominated by Donald Trump, did not do what many expected and move directly toward rate cuts. Instead, Warsh removed forward guidance, a step Ryan described as making the Fed look more decentralized because responsibility was spread across the full committee.
David responded by asking whether Trump had attacked Warsh online. Ryan said he had not. According to Ryan, Trump actually shielded him in public, saying that with 12 members voting, one person could not decide the whole outcome. Even so, Trump still believes U.S. rates should be below 1%.
David said that leaves two broad readings: either there is private political theater behind the scenes, or the Fed really is acting independently of the White House. If the latter is true, he argued, the rate hike was not about printing money or weakening the dollar but about confronting an economy that remains too hot. Ryan added that Warsh’s position was that inflation is still too high and that raising rates was the responsible choice.
Ryan then tied that back to crypto. Historically, higher rates pulled liquidity out of risk markets. But with government debt now so large, he said, higher interest costs could still end in money printing to service that debt, which would weaken the currency. His conclusion in the episode was that Bitcoin wins under either path.
After Clarity stalls, the SEC moves with an “innovation exemption”
Ryan then revisited the Clarity Act. He said Trump had agreed to changes in the ethics provisions and that many traders thought passage was likely. On Polymarket, the probability of passage doubled, Bitcoin rose to $79,000, and Ether reached $2,500. But when the bill came to a Senate vote, Democrats voted against it as a bloc and it fell short by 11 votes.
David said Democrats may have concluded they could win the midterms and saw no reason to hand Republicans a political win. He also said the ethics language only applied going forward and did not address the Trump family’s past $1.4 billion in crypto-related assets. In his view, Trump’s own wavering on the issue was also one reason the bill failed.
Even so, the hosts said regulators were still moving. CFTC official Mike Selig said the United States remains the crypto capital, and SEC Chair Paul Atkins posted that the agency would act even without the legislation, adding a bolded “stay tuned.” Ryan said the SEC then released an “innovation exemption” that same morning.
As they described it, the exemption allows tokenized stocks that are genuinely backed one-to-one by real-world shares to trade legally on DEXs such as Uniswap without automatically being treated as unlawful broker activity.
David said firms such as Securitize and Coinbase stand to benefit most. He noted that Securitize shares jumped 30% that day. He also drew a line between this model and offshore tokenized equity products offered by Robinhood or Ondo. In this case, he said, the point is to let U.S. residents legally trade tokenized stocks with voting rights and dividend rights, provided they complete KYC.
David added that the SEC held a separate Q&A session on the policy and that he asked what happens to offshore tokenized stocks. The answer, he said, was that those products remain offshore and are still off-limits to U.S. users. The exemption is meant to create a compliant domestic path.
Ryan said the framework comes with notable constraints. First, the assets have to live on fully public, permissionless blockchains, which may exclude more centralized chains. Second, the volume cap is strict: daily trading volume cannot exceed 0.25% of the stock’s daily volume in traditional equity markets.
David said that cap sharply limits what larger pools of capital can do and makes the setup feel more like a sandbox than an open market. Speaking from a retail perspective, he said he would rather use offshore permissionless versions on Uniswap than complete identity checks for a heavily restricted domestic product.
Ryan said the SEC’s approach does at least answer complaints raised by AMC Entertainment’s CEO, who had criticized Robinhood’s on-chain AMC token for lacking voting rights and called it “disgusting.” Under the SEC’s rules, compliant tokens must carry voting rights. Ryan also said Robinhood’s Vlad had promised to add physical redemption and voting rights to its offshore tokens.
Could options become DeFi’s next major trade?
The conversation then shifted to derivatives. Ryan said perpetual futures are already a major force in crypto, with Hyperliquid and Lighter among the leading venues, but options have repeatedly failed to gain traction and many projects in that area have died off. He asked whether this time might be different.
David said he had recently spoken with the team behind Derive. Their view was that options could not work earlier because they need a market with many participants holding different views. In crypto’s earlier years, the user base was dominated by retail traders and native funds, and there simply were not enough differentiated players.
He also said the most recent market selloff exposed a major weakness in perpetuals: traders can still be liquidated during interim volatility even if they are right on direction over the full move. Ryan contrasted that with options. Once a trader chooses the underlying asset, strike, and expiry, the position does not face the same path-dependent liquidation risk before expiration. He added that even if a platform goes down or has operational issues, the options contract itself still belongs to the holder.
David said that realization feels like discovering a new continent. In the episode, Derive was described as the largest options venue by trading volume, and its token was said to have risen 150% last month. Hyperliquid and Lighter are also trying to move into the same area. Ryan’s conclusion was that if all three are competing for the trade, options could become one of the biggest themes for the rest of the year.
He also pointed to Kraken’s effort to bring perpetuals back onshore in the U.S. through a compliant HIP3 market that requires KYC. Under that structure, U.S. users would access Hyperliquid perpetuals through Kraken’s front end. Ryan called that a major development.
Venice AI, Arc Chain, and S&P Global buying OpenZeppelin
On AI-linked tokens, Ryan cited a token consumption chart published by Erik Voorhees for Venice AI. He said usage has been doubling roughly every two months: from 50 billion tokens consumed per day six months ago to 250 billion per day now. If that pace continues, he said, tokens such as VVV and HYPE that can genuinely capture value may help break the idea that tokens are inherently empty as investments.
David said the industry needs dozens of projects like that: businesses that can actually make money and align investor incentives with the product. In his view, that is part of what would rebuild confidence in the sector.
The hosts also discussed Arc Chain, described in the episode as the chain behind USDC. It has now launched, but Ryan said the first day saw more than 100 meme-coin launchpads appear on the network. He suggested that looked out of step with Arc’s original identity around payments and settlement. David agreed and said it felt inconsistent for a chain positioned around core financial infrastructure to chase meme-coin activity. His interpretation was that Arc may be trying to ride market heat first and work on payments and tokenized-asset rails later.
The episode closed with a major traditional-finance acquisition. S&P Global has acquired smart-contract audit firm OpenZeppelin. Financial terms were not disclosed, but the report cited in the discussion said OpenZeppelin had protected $37 trillion in asset transfers.
David said he would not have believed that headline in 2021. Seeing it in September 2026, he said, gave him the sense that the industry had finally come through the other side. Ryan said the process took longer than expected and was more painful than many thought, but that the market had nonetheless reached this point. With the fourth quarter approaching, he said, the central question now is still how blue-chip crypto assets behave from here. If the early bull case is confirmed and current price zones hold, that will remain the market’s main focus.