Hivemind Brief 004 | Bitcoin Finds Its Footing and the Math Behind Crypto Trends

Welcome back to The Hivemind Brief!

Plenty in motion this quarter, on-chain and off.

In this issue: BTC as macro hedge, fresh pressure on the SEC, and a breakdown of the real drivers behind crypto price action.

Also, our upcoming NY panel on private placements/public treasury plays, Total Value Unlocked Season 2: Market Infrastructure, new digital art liquidity pathways with Lightyear, a sneak peak at Blueprint for digital asset orchestration, and more.

From Richard Skeet, Managing Partner and Head of Research

"War does not determine who is right – only who is left." – Bertrand Russell 

The first half of 2025 has delivered a remarkable paradox: while regulatory clarity accelerates and institutional adoption deepens, digital asset markets exhibit bifurcated performance reflecting the sector's ongoing maturation. The bipartisan advancement of the GENIUS Act through Senate committee with a decisive 68-30 vote represents the first comprehensive federal framework for stablecoins, establishing reserve requirements and transparency standards for a $232 billion market that has mainly operated without federal oversight. The House's formal introduction of the CLARITY Act would finally delineate regulatory jurisdiction between the SEC and CFTC, transitioning the industry from enforcement-by-examination to clear operational frameworks. 

Bitcoin has demonstrated its unique positioning as a macroeconomic hedge, with recent research confirming that its price movements are systematically driven by global liquidity conditions (41% influence¹) rather than traditional monetary measures. Trading near all-time highs with notably reduced volatility, Bitcoin reflects this macro sensitivity as inflationary pressures dissipate. Treasury breakeven curves suggest disinflation is resuming² – absent geopolitical impacts, of course. Bitcoin has evolved from a speculative instrument to a legitimate portfolio allocation, evidenced by its resilience during tariff and geopolitical turbulence and its proven track record as institutional capital increasingly distinguishes between stores of value and experimental platforms. 

The market's maturation reveals itself in divergent performance between Bitcoin and altcoins. Despite Ethereum's sharp rise over the past month, it continues to underperform Bitcoin in relative terms, while Solana faces similar headwinds despite technological advantages. This isn't market dysfunction – it's evidence of capital flows favoring proven utility over speculative potential as regulatory clarity emerges. The situation remains fluid, and the marginal dollar of capital flow shifting can have a meaningful impact. This is illustrated by the initial success of the proliferating crypto treasury strategies that have burst into existence, bringing fresh eyes via accessible vehicles. This will likely lead to more interest in the digital assets space overall across a broader spectrum of coins.  

The escalating Israel-Iran conflict has introduced significant geopolitical risk, with oil prices surging - at least briefly - and markets exhibiting heightened volatility as fears of broader Middle Eastern conflict emerge. The human cost – with hundreds of casualties and civilians fleeing major cities – underscores that geopolitical events are human tragedies with profound economic implications. Russell's observation about war determining "who is left" rather than "who is right" resonates as markets attempt to price existential risks. These tensions remain a tail risk but naturally dampen animal spirits and reinforce diversified exposure value. Or, as the events of the weekend show, sometimes markets will simply "look through" current affairs.

What emerges is a digital asset sector undergoing fundamental structural change. The era of regulatory hostility is ending, institutional adoption is accelerating, and Bitcoin continues evolving toward mainstream acceptance. The convergence of regulatory clarity, institutional adoption, and macroeconomic supportiveness creates conditions for sustainable growth rather than speculative euphoria. In a market shaped by liquidity flows and regulatory frameworks, adaptability and patience will distinguish successful participants as clarity emerges from complexity. 

From Sayuri Ganesarajah, Head of Legal and Compliance

The last quarter has marked a pivotal shift in the digital asset landscape, particularly in the United States, where developments have been more progressive than ever in the sector's history. 

In June 2025, the U.S. Senate passed the bipartisan GENIUS Act, widely considered the most consequential federal legislation on stablecoins. The Act proposes a robust regulatory framework for U.S. dollar-backed stablecoins, aiming to strengthen transparency, consumer protection, and institutional adoption. The House is expected to debate the bill in H2 2025. 

In parallel, two additional digital asset bills are gaining momentum: (1) FIT21 (Financial Innovation and Technology for the 21st Century Act), which seeks to define the jurisdictional split between the SEC and CFTC clearly; and (2) the CLARITY Act, designed to help startups understand when and how tokens transition from securities to non-securities. In addition, the launch of the U.S. Strategic Bitcoin Reserve via executive order in March signalled Bitcoin’s emergence as a government-held reserve asset and sparked renewed institutional optimism. 

Outside the U.S., the EU’s Markets in Crypto-Assets Regulation (MiCA), the EU’s first comprehensive digital asset framework, went live in June 2024 and is actively being implemented in 2025. MiCA regulates both Crypto-Asset Issuers (e.g., stablecoins and utility tokens) and Crypto-Asset Service Providers (e.g., exchanges and custodians), and we have recently seen Gemini, OKX, and Crypto.com secure CASP licences, as well as Coinbase pursuing approval in Luxembourg. MiCA has generally been well received, offering firms a unified regulatory passport across the EU. Its implementation may serve as a reference model for other jurisdictions looking to establish regulatory clarity while encouraging innovation. 

The EU’s early regulatory leadership is unfolding, but it is the U.S. administration that will ultimately define the trajectory of global digital asset policy. However, fundamental questions remain, such as whether and when digital assets qualify as securities under the Howey Test. The current wave of legislative momentum suggests a more constructive and coordinated regulatory environment. For the first time, there is a real sense that digital assets are being taken seriously at the highest levels of government. While challenges remain, the tone and direction of policy are grounds for cautious optimism. 

Learn more about the GENIUS Act and its implications in our latest piece by our Corporate Counsel, Leland Chang: GENIUS Act: Explained

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