Digital assets stay surprisingly resilient amid Iran turmoil, a hawkish Fed and CLARITY Act uncertainty
A deteriorating crisis in Iran, a more aggressive tone from the Fed and doubts over the CLARITY Act are pressuring crypto prices. Yet digital assets have shown unexpected resilience, buoyed by rising IBIT options activity and growing institutional flows.
The CoinShares note dated 4 May 2026, authored by James Butterfill and Marc Des Ligneris, outlines three converging stressors that could weigh on cryptocurrency valuations over the coming month. First, the worsening situation in Iran fuels fears of heightened market volatility. Second, the Federal Reserve left policy rates unchanged but adopted an unusually hawkish stance: three votes against a rate cut and only one in favour, suggesting a continued restrictive posture at least until the June meeting.
On the regulatory front, the CLARITY Act—passed by the House in July 2025—remains stuck in the Senate. Senator Thom Tillis has tied his support to the introduction of ethics rules aimed at curbing conflicts of interest, even those linked to the Trump family. While a favourable vote in the Banking Committee would lift the odds of final passage (Polymarket puts the probability at 46 % as of today), the calendar is tight: Memorial Day recess, an August summer break and a packed election‑season agenda leave little room for delay.
Despite these headwinds, digital assets have displayed a surprisingly robust performance. The open‑interest on IBIT options surged shortly after launch, reaching levels comparable with the biggest crypto‑native platforms and holding steady thereafter—signaling a new wave of institutional participation.
From a token‑specific perspective, an approved CLARITY Act would chiefly benefit Ethereum and other altcoins. Classifying Ethereum as a commodity would remove lingering uncertainty around staking, DeFi and institutional allocations. Conversely, a failure or a postponement to 2027 could trigger a risk‑off rally, with potential price drops of 15‑25 % for ETH, SOL and XRP, while Bitcoin, already viewed as de‑facto regulated, would likely hold up better.
In the broader market context, gold has been penalised by expectations of higher real rates, whereas Bitcoin has shown modest weakness but retained resilience. “Whale” activity turned negative, with increased sell‑offs, and digital‑asset ETPs recorded outflows of roughly $605 million, breaking a four‑week inflow streak. At the same time, equity exposure to blockchain‑related firms remained solid, with inflows of $624 million over the past four weeks—almost double comparable periods—indicating investors are diversifying through traditional channels while still betting on the sector’s growth.
The emerging picture is clear: while direct crypto exposure is being trimmed as a macro‑prudential precaution, the market’s credibility is reinforced by the growing availability of recognised financial instruments and an accelerating institutionalisation process.