Hyperliquid Executive "Even if US Crypto Bill Fails in August, Hope Remains for September"

▲ US Congress, cryptocurrency regulation, Bitcoin (BTC), Hyperliquid (HYPE)/AI generated image

The US cryptocurrency market structure bill faced a crisis of being stalled just before the August recess. However, an analysis suggests that the bill's failure does not mean a halt to the institutionalization of the cryptocurrency industry, as there remains the possibility of re-introduction in September and independent rule-making by regulatory agencies.

Adam Minehardt, Chief Policy Officer at Hyperliquid, stated in an interview with Paul Barron, host of the crypto-specialized YouTube channel Paul Barron Network, on August 4 (local time), “It is very important to record a procedural vote this week.” The House of Representatives has already entered recess, while the Senate still has procedures remaining for floor consideration, a vote to end debate, and amendment processing. 60 votes are needed for the bill to pass. Although Republicans hold 53 seats, the possibility of at least two defections is being discussed, meaning more than 10 Democratic senators' approval is needed. Minehardt believes that even if final passage fails in August, the possibility of floor consideration in September remains.

The biggest obstacle to bill negotiation has shifted from market regulation to political issues. Minehardt pointed out that as the midterm elections draw closer, the debate is focusing more on the cryptocurrency business and ethical issues of former US President Donald Trump's family than on policy. He commented, “From a policy perspective, it is a good bill, and its current content leans more Democratic than Republican,” but also assessed that political interests have entangled the negotiations. Some Democrats have even used election messages framing support for the bill as supporting the Trump administration's cryptocurrency business.

The issue of stablecoin yield, opposed by the banking sector, was also identified as a key factor that consumed the bill's processing time. Minehardt explained that this debate dragged on for about six months, leading the bill to enter the political phase of the midterm elections. It is analyzed that 3-4 Republican senators, conscious of the banking sector's opposition, are considering voting against it, and if 5-7 defections ultimately occur within the Republican party, it will be difficult to place the blame solely on the Democrats. He emphasized that not only large banks but also regional banks, which influence local employment and political organizations, sway the decisions of lawmakers.

He drew a line at the possibility of the bill's failure leading to an immediate collapse of the cryptocurrency market. Minehardt stated that since the probability of the bill's passage has significantly fluctuated in prediction markets, the risk of failure may already be largely reflected in the market. The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have the authority to establish a significant portion of the regulatory framework using existing laws alone. He predicted that if the bill fails, these two agencies are likely to accelerate their long-delayed rule-making. He also pointed out that the cryptocurrency industry's strategy of highlighting this bill as the sole solution determining the industry's success or failure should be re-evaluated.

The direct impact on Hyperliquid is assessed as limited. While the US cryptocurrency market structure bill primarily focuses on spot market regulation, Hyperliquid's main trading products are derivatives, including perpetual futures. Minehardt explained that while the bill's passage could improve the overall investment environment for crypto assets, there are not many provisions directly linked to Hyperliquid's business. He emphasized that as the chances of passage decrease, the industry should prepare for business strategies and a regulatory agency-led framework after the bill's failure.

[Article Key Summary]

-For the US cryptocurrency market structure bill, a procedural vote for re-introduction in September is more important than final passage before the August recess.

-Ethical controversies surrounding the Trump family and the banking sector's opposition to stablecoin yield are hindering bipartisan negotiations.

-Even if the bill fails, rule-making by the SEC and CFTC could accelerate, and the direct impact on Hyperliquid is limited.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*