Bitcoin Wins Big While Altcoins Face New Regulatory Reality

Added: 2026-05-20

[00:00:00]Good day everyone. Welcome to another episode of On Time with Adam Livingston.

[00:00:03]We just found out that the latest draft text for the Clarity Act is now out and it is scheduled to be marked up on Thursday. Yes, perhaps we're getting the final markup in two short days here. And we are going to get into some of my favorite takeaways because this is just proving that Bitcoin is far superior than crypto. So, let's just quickly review here. Congress just spent thousands of hours, millions of dollars in legal fees, and of course, an unknowable quantity of staff or aderall trying to write the rule book that describes everything in crypto except for Bitcoin. The text is very interesting because they had to actually invent a new legal category. They're calling something an ancillary asset to capture every single token whose value depends on the entrepreneurial or managerial efforts of some identifiable group of humans. You know, crypto originators, promoters, foundations, insider unlock schedules, you know, the entire carnival of the crypto clowns.

[00:01:08]Bitcoin has none of that though. Bitcoin has never had any of that. There is no chief executive officer of Bitcoin that you need to subpoena. There is no foundation that you can raid and no Discord moderator who controls the road map. So what Congress accidentally did while trying to regulate crypto, they actually published the most authoritative legal definition of why Bitcoin is not crypto that has ever existed in a federal statute here. They wrote the test and Bitcoin doesn't pass the test. Bitcoin doesn't take the test because Bitcoin is the proctor. Crypto needs clarity though because crypto recreated trust with extra steps and a token attached. Bitcoin is clarity because Bitcoin removed trust entirely.

[00:01:54]Every other digital asset on Earth at some level is a bet on a person and a team and a treasury or a road map.

[00:02:02]Bitcoin is just a bet on math, energy, and the fact that humans will always want a money that their government can't dilute over a long weekend. So, is this bullish for Bitcoin? Absolutely it is.

[00:02:14]I'm going to give you my opinion shortly, especially as we get into the whole debate around the stable coins.

[00:02:19]But first, I just have to point out that it's very funny that this draft of the bill is actually creating something called regulation crypto, which is a term that when I say it makes me want to immediately take a shower. So, what this is, it's a fundraising exemption for ancillary asset offerings as long as they stay under certain caps. The cap is the greater of $50 million per year up to four years or 10% of outstanding ancillary asset value whichever is greater. So when we look at all of the non Bitcoin crypto defy nonsense out there essentially this is clarifying roughly $200 million of capital legally raised per project then you have no SEC registration required provided that you check all of the boxes. And I want to be fair here. This is genuinely bullish for compliant token issuers. Sure, if you are out there building a real product with a real token and a real cap table, the fog has been lifted for you people.

[00:03:22]You now have a paved road from concept to capital to listing without spending 3 years in regulatory purgatory. And that is a real improvement. And the people who pushed for it, yeah, sure, they deserve their credit. That's fine and nice. But we need to pause and then absorb what this regulation is actually admitting. The United States Congress just wrote a chapter of federal law explaining how token projects are allowed to raise money from the public.

[00:03:49]There is a cap. There is a disclosure regime. There is a 4-year window. There is now this entire legal apparatus dedicated to legitimizing the act of selling tokens to retail in exchange for promises about future development.

[00:04:04]Bitcoin needed none of this. Bitcoin raised zero dollars. Bitcoin sold zero tokens. Bitcoin didn't pitch a single venture capitalist. Did not hire a single law firm. Did not host a single conference in Dubai with a step and repeat banner. Bitcoin was launched by a shadowy figure named Satoshi Nakamoto who paid for the Genesis block out of his own pocket and then disappeared before he could collect a single paycheck. The total amount of money raised in Bitcoin's pre-launch fund raise is the same number as the total number of foundation advisory boards and treasury allocations Bitcoin currently has, which is the number zero. And then further separating Bitcoin and crypto, we just need to look at the disclosure rules. The disclosure requirements are where this comedy turns into anthropology, kids, because this draft of the bill requires public disclosures with timely and continuing access.

[00:05:04]Electronic furnishing, web posting, machine readable formats, and plain English legends. Yes, this is what the actual verbiage is because they want the average retail investor to understand what they're buying without a Bloomberg terminal. And this is my favorite part of the language because it's hilarious.

[00:05:23]Let's look at this phrasiology right here. Use, value, or resale. So, it requires the disclosure of all planned activities promoting the use, value, or resale of the asset, including trading market support. So, I want you to read that last clause very slowly. Including trading market support. So, what does this mean? The federal government has now formally acknowledged that a meaningful chunk of crypto token value comes from the issuer actively propping up the market for their own token. This is not some slander that I'm inventing.

[00:06:00]This is a category of activity that Congress felt the need to put under disclosure rules, which means that it happens enough to warrant a regulation, which means that the polite assumption that crypto markets are organic price discovery is now officially a federal joke. Imagine for a moment that Apple had to disclose its plan to promote the use, value, and resale of Apple stock.

[00:06:25]Imagine that General Electric had to publish a road map for its share price.

[00:06:30]You would correctly call that a Ponzi disclosure regime. And that is what crypto needs because crypto at the protocol layer is often a coordinated effort between a small group of insiders and a much larger group of bag holders who arrive later and were told to be patient. And it's beautiful because last time I checked, what was Bitcoin's disclosure packet? With Bitcoin, the disclosure is the source code, and that is a beautiful thing. The road map is the difficulty adjustment, which has been running on schedule for 16 years and doesn't care about your feelings.

[00:07:03]So, if your asset requires plain English legends to explain why it has value, that means your asset has a problem that plain English can't fix. So buried in this draft, there is also a provision that may end up being the single most consequential sentence in the entire bill. This is where things start to get fun. A network token is not an ancillary asset or a security if on January 1st, 2026, it was the principal asset of an exchangeraded product listed on a national securities exchange. This is very interesting. So you might be asking, Adam, what does that mean?

[00:07:42]translated into English. Let me tell you, if you got your spot ETF approved before the cutoff date here of January 1st of this year, that means you graduated. You got out of the regulatory bucket entirely. It means that you are now a commodity-like base asset under the cleanest legal regime America has ever offered, a digital asset. Bitcoin is in that bucket because, hey, obviously there are coin ETFs out there.

[00:08:10]The Ethereum ETF made it under the wire, which Ethereum maximalists will celebrate, and I will not begrudge them because everyone deserves a good day.

[00:08:19]But the strategic effect for Bitcoin is enormous because every other coin, the L1's, the L2s, every memecoin with a unicorn logo, you know, the ones with a crypto Twitter account by someone named Kobe. Well, they're now staring at a multi-deade obstacle course of classification reviews, disclosure regimes, intermediary licensing, and don't forget about the endless control test just to reach the regulatory altitude that Bitcoin now already cruises at. So, why would this be bullish for Bitcoin, at least in terms of number go up? Because the allocators out there, capital allocators, they hate ambiguity. Pension funds hate ambiguity.

[00:09:00]So do insurance company CIOS. They hate ambiguity so much they would rather leave returns on the table for the rest of their careers rather than touch an asset that their compliance team cannot describe in a single sentence. But now Bitcoin can be described in a single sentence because you know we could now say that it is the principal asset of a regulated ETF that the federal government has explicitly carved out of the speculative bucket. That sentence could unlock more institutional capital than any marketing campaign could ever generate. The downstream effect is that Bitcoin becomes the default base asset for everything that touches a fidiciary.

[00:09:42]Raas get a green light to buy Bitcoin.

[00:09:45]Pension boards get an answer for the agenda item that has been getting deferred since 2021. The corporate treasury teams out there, they get a hedging instrument if they want one that survived the regulatory gauntlet. The banks could get an asset that they can custody without filing six different memos. Especially as we could potentially get an updated Basil framework by the end of this year. And every other crypto project is just starting a yearslong game of legal twister, hoping that when the music stops, their foot is on a squareled commodity and not on a squareled unregistered securities offering.

[00:10:22]Bitcoin is officially already off the mat drinking water and watching the game. Now we get to the most exciting part of the Clarity Act drama that has been unfolding. It has obviously been around stable coin, stable coin rewards because the banking lobby has been lobbying Congress against the language of the bill because they hate the potential for customer deposit flight.

[00:10:44]And the debate around this is split in the Bitcoin camp. There are bitcoiners who are absolutely against stable coins because they are the ideological purists. They absolutely hate that they are kind of rails just existing in the fiat system. Stable coins are not bitcoin. And I agree with them obviously. Now that said, I do think there is a pragmatic case to be made for stable coins because they are useful fiat rails for further onboarding into a bitcoin ecosystem. Michael Sailor has been making this claim a lot lately. the stable coins that are being built with STRC, those are definitely leading capital into the Bitcoin ecosystem. So, the debate is raging on. Obviously, stable coins are not Bitcoin. But regardless of what you think about stable coins, what your philosophical stance is, in my humble opinion, I love it because the banks hate it. The banks want your deposits because deposits are the cheapest funding source in all of capitalism. crypto platforms. They want tokenized dollar liquidity because that is how they capture the trading economy of the next decade. At least that's what they think. The Treasury wants stable coins to buy Treasury bills because the United States is running fiscal deficits that would make 1980s Argentina blush.

[00:11:57]And somebody just has to be the marginal buyer of the debt that funds the falling empire. So, it's clear that everyone in this fight is trying to own the rails of the currency that is being printed into structural impairments. We know that obviously fiat's value is collapsing. A stable coin is by definition a token that promises to be worth $1. Yes, if it's a dollar stable coin. If the dollar is being debased at 6 8 10% a year in real terms, then the stable coin is a token that promises to lose value at the same rate as the dollar forever by design. So in essence, it is the world's most successful product for a guaranteed slow motion wealth destruction, but you get the user experience of a Venmo account. Now, I'm not trying to slander against stable coins as a tool. They are genuinely useful for payments, remittances, and potentially, like I mentioned, the on-ramp economy, but at the same time, stable dollar coins, that's just a better fiat, a dollar with a faster API and potentially an even worse counterparty depending on who's providing it to you. So, a stable coin is essentially the digital fentinel of monetary debasement engineered to feel safe while it dissolves your purchasing power on a schedule set by the people you did not elect. Bitcoin is the exit from the dollar system itself. Not a faster dollar or a tokenized dollar, not a yieldbearing dollar. It is the exit, the fire escape, the thing that you reach for when you finally understand that the building has been on fire since 1971. So when we look at what's happening with the clarity act, when we look at the disgusting word of crypto, we need to ask the question, who controls the system here? Why is there legislation, etc. At the end of the day, when we ask this question, who controls the system? We know that crypto can't answer it because in 99% of these so-called decentralized protocols, the honest answer always is a small group of co-founders, a multi-IG wallet, a token weighted governance vote dominated by venture funds and some telegram channel where the actual decisions get made before the onchain vote ever happens.

[00:14:11]The vote is theater. The decentralization is set dressing.

[00:14:16]protocol is a company with extra steps and worse legal structure. And now Congress has noticed and this isn't a knock on everybody in DeFi. Obviously, in my humble opinion, I just got to say there are genuinely interesting experiments happening. Yes, they exist.

[00:14:33]Not everybody is a bad actor. The honest builders know who they are, okay? They also know that the regulatory hammer is coming for the protocols that have spent years claiming that they are decentralized while also retaining admin keys, upgrade rights, and of course, emergency pause functions that would make a community bank jealous. So, this legislation is going to pass in some form. There is not a doubt in my mind.

[00:14:58]The lawyers are going to get rich. The compliant tokens will graduate into a more legitimate version of the same speculative casino that they have always been. And then the non-compliant tokens will quietly fade or of course just move offshore. And Bitcoin will just keep producing one block roughly every 10 minutes with a difficulty adjustment that does not read the news on a network that does not require an act of Congress to know what it is. So what is the bullish news for Bitcoin? We now have seen that Congress wrote a thousand pages trying to define what crypto is.

[00:15:33]and they accidentally wrote the strongest legal endorsement of Bitcoin ever published in the Federal Register.

[00:15:39]Bitcoin will win because it has to. And every regulation written from this point forward will by trying to make sense of everything else out there make Bitcoin look more inevitable. And if you are interested in being securely positioned in Bitcoin before the next great capital shift happens, Swan Private is for you.

[00:16:00]If you want to partner for your generational wealth, whether you're a family office, an individual, or a company, we are here to help you every single step of the way. Go to swan.com/noscondb to learn more. My name is Adam Livingston. Thank you for tuning in to another episode of On Time. Bitcoin, not crypto, is the answer. Never, ever forget it. Class dismissed.