Hello there {{first_name|you embodiment of curiosity}};

Welcome to today's edition of Osiris News. Bitcoin finally broke the range, ripping past $96,000 and punishing anyone betting on a "sell the news" inflation print. The market absorbed a massive $753 million in spot ETF inflows in a single day, creating a supply shock that forced nearly $800 million in short liquidations. While price action looks euphoric, the real story is the legislative text circulating in the Senate Banking Committee. The CLARITY Act draft has landed, and it is a mixed bag of institutional fast-tracks and banking lobby protectionism. Wall Street is buying the asset while simultaneously trying to rewrite the rules of the yield curve. The disconnect between price discovery and regulatory maneuvering is closing fast.

🐂📈 Wall Street Just Bought Bitcoin Faster Than It Can Be Made

Spot Bitcoin ETFs absorbed $753.7M in daily inflows, the highest in three months, triggering a short squeeze that pushed BTC past $96,000. Institutional rebalancing is outpacing miner supply, aggressively punishing bearish positioning.

🏛️⚔️ Regulating Crypto Interest Pits Banks Against Digital Wallets

The Senate Banking Committee released a draft bill banning passive interest on stablecoins, a move traditional banks favor to protect deposit margins. While "activity-based" rewards remain permitted, the legislation threatens the yield models of major crypto platforms.

💜🤝 Polygon Labs Spends $250M to Acquire Coinme and Sequence

Polygon Labs is pivoting toward a global payments stack by acquiring fiat on-ramp Coinme and wallet provider Sequence for over $250M. The move integrates licensed money transmission with smart wallet infrastructure to facilitate seamless stablecoin transfers.

🐕🩸 The Mechanics Behind a Mayor’s Failed Crypto Rug Pull

Former NYC Mayor Eric Adams’ "NYC" token crashed 81% minutes after launch as creators drained $2.5M in liquidity. On-chain data reveals extreme centralization, with top wallets controlling 92% of supply, leaving retail traders with significant losses.

The mechanism driving this week's price action is a classic liquidity crunch on the sell side. Spot Bitcoin ETFs absorbed supply at a rate significantly higher than daily mining issuance, led by Fidelity and Bitwise. When you combine that with MicroStrategy acquiring another $1.25 billion in BTC and Strive Asset Management consolidating a 12,000+ BTC treasury, the order books simply ran out of sellers. This forced a short squeeze that cleared out bearish positioning that had accumulated around the inflation print. The data shows a unified bullish outlook between the top assets, suggesting broad market agreement rather than a capital rotation trade where one asset cannibalizes the other. The flush of borrowed positions was violent, but it reset open interest to healthier levels relative to the new price floor.

While the charts look clean, the legislative plumbing is getting messy. Senate Banking Chair Tim Scott released the 278-page draft of the CLARITY Act, and the banking lobby’s influence is evident in the stablecoin provisions. The text explicitly proposes banning crypto platforms from paying passive interest on stablecoins. This is a direct attack on the "crypto savings account" model used by exchanges like Coinbase to compete with traditional bank deposits. JPMorgan’s CFO Jeremy Barnum reinforced this stance publicly, labeling yield-bearing stablecoins as "shadow banking." The banks are fine with blockchain rails, provided they maintain their monopoly on the net interest margin derived from customer deposits. This sets up a specific conflict for the markup session: crypto exchanges want to share yield with users, while banks want to legally prohibit that competition.

However, the bill offers a significant concession to the industry in the form of an ETF fast-track. A provision grants automatic commodity status to any token that is the main component of an exchange-traded product listed by January 1, 2026. This effectively whitelists assets like Solana, XRP, and Litecoin alongside Bitcoin and Ethereum, bypassing years of potential SEC litigation regarding their security status. It creates a bifurcated market where "ETF-grade" assets get regulatory clarity while everything else remains in limbo. This legislative arbitrage is likely driving the constructive, aligned sentiment we are seeing across the majors, as the market begins to price in a permanent regulatory moat for the top-tier assets.

Infrastructure players are positioning themselves for this regulated future. Polygon Labs announced a $250 million acquisition spree, buying Coinme and Sequence to build an "Open Money Stack." This is a distinct pivot from their previous identity as purely an Ethereum scaling solution. By verticalizing fiat on-ramps and wallet infrastructure, Polygon is betting that the future value capture isn't just in block space, but in the payment settlement layer itself. They are effectively building a compliant, full-stack alternative to the Visa/SWIFT network, anticipating that stablecoins will need regulated rails to operate under the new frameworks proposed in Washington. This move validates the thesis that L2s must evolve into service providers rather than just pipes for transaction throughput.

In contrast to the institutional build-out, the retail sector provided a reminder of why regulators remain aggressive. Former NYC Mayor Eric Adams launched a token that crashed 81% within thirty minutes, with on-chain data showing the creators removed $2.5 million in liquidity immediately after launch. While some funds were returned following public outcry, the incident serves as ammunition for those arguing that the "ancillary asset" classification needs strict oversight. It highlights the widening gap between the professionalized, ETF-driven market and the celebrity-driven on-chain casino. The analyst pulse remains steady despite these localized blowups, indicating that the market is increasingly distinguishing between institutional infrastructure and retail noise. Sentiment across the majors has synchronized in positive territory without hitting overheated extremes.

Here’s a breakdown:

Volatility will likely persist through Thursday as the Senate Banking Committee marks up the CLARITY Act. Traders should watch for any amendments regarding the stablecoin yield ban, as Coinbase has threatened to pull support if the language remains restrictive. If the "ETF fast-track" provision survives the markup intact, expect continued repricing of the assets that currently have active ETF applications. The release of the Senate Agriculture Committee’s legislative text on January 21 will be the next major catalyst, reconciling the CFTC’s role in this new market structure. Until then, the supply-demand imbalance in the spot market favors the upside, provided the legislative news doesn't turn hostile.

Until tomorrow,
- Dr.P