Coinbase, Circle and Bullish jump as Clarity Act proponents express optimism about bill

Coinbase (COIN), Bullish (BLSH) and Circle (CRCL) were outperforming other crypto stocks Wednesday, with COIN and BLSH up about 8% and CRCL gaining nearly 10%. Bullish is CoinDesk’s parent.

Clear Street analyst Owen Lau pointed to two possible reasons for the moves, including that investors might be shifting money out of the AI trade and fresh optimism around the Digital Asset Market Clarity Act.

“I think it is driven by the reversal of AI trade, and optimism from Senators Tim Scott and Cynthia Lummis, as well as from White House representative Patrick Witt yesterday that they are still cautiously optimistic about the passage of the Clarity Act in September,” Lau told CoinDesk.

The reversal of the AI trade refers to investors taking profits in AI-related stocks after a strong run and moving some of that money into other parts of the market. COIN, BLSH and CRCL appear to be among the beneficiaries Wednesday, with bitcoin BTC$64,316.33 also gaining about 2% over the past 24 hours.

Renewed optimism regarding the passage of the Clarity Act could also be driving prices up.

Speaking at the SALT conference in Jackson Hole, Wyoming on Tuesday afternoon, Senate Banking Committee Chairman Tim Scott said the bill has a “really good shot” of moving forward in September.

“There’s no question about the fact that this will become law,” Scott said. “The only question is how do we get it to the finish line, and when does that happen?”

The Senate is scheduled to hold a procedural vote on the crypto market structure bill on Sept. 15, a key test of whether supporters have enough votes to advance the legislation. Having a firm date could put pressure on lawmakers to settle the remaining disagreements over issues including crypto rewards, decentralized finance and ethics provisions.

Patrick Witt, executive director of the White House’s Council of Advisors for Digital Assets, also sounded upbeat about the negotiations. “We’re down to kind of more of an A-B type of environment,” Witt said. “That’s when you’re at the point where a grand bargain can be had.”

Witt said lawmakers will return to negotiations in the coming weeks and try to secure enough support for the Sept. 15 vote. The White House has not publicly responded to a proposal on the ethics provision sent by Senators Ruben Gallego and Thom Tillis. Democrats have said they’ll withhold support without a strong ethics provision.