Key Takeaways

The CLARITY Act was meant to settle who regulates which crypto asset. Brett Rentmeester explains its core purpose was to clarify whether a given token is a security under the SEC or a commodity under the CFTC, since Bitcoin and Ethereum are already treated as commodities.

It stalled despite earlier bipartisan support. Rentmeester says it "was really dead on arrival" in the Senate this time, pointing to ethics concerns around administration crypto involvement and, especially, an unresolved fight over whether stablecoins can pay yield.

Stablecoin yield is a real threat to bank deposits. He warns that "if stablecoins can pay all of this interest and we're only paying a fraction of that, all the money is going to leave the banks," which he calls a genuine banking risk.

Regulators are moving anyway, without the law. Days after the bill stalled, the SEC and CFTC issued their own findings that Rentmeester says will "open the gates for banks and brokerage firms and all sorts of financial participants to start tokenizing assets."

Most tokens are still highly speculative. Rentmeester estimates "probably 95% of it will end up with no value," and stresses that Bitcoin and Ethereum are mentioned "as examples of the industry, not recommendations."

Key Moments

00:00 - CLARITY Act, stablecoins and the banking risk Rentmeester's opening case for why the bill's failure matters.

03:20 - Why the CLARITY Act matters for crypto regulation The security-versus-commodity question the bill was meant to settle.

06:24 - Stablecoin yields could threaten traditional banks Why bank deposits are at the center of the stall.

09:20 - SEC, CFTC and the push to tokenize Wall Street The regulatory exemptions moving forward without new legislation.

12:10 - Tom Lee: Wall Street is moving onto blockchain rails The tokenization clip from Tom Lee, chairman of an Ethereum-holding company.

15:02 - How investors should think about stablecoins Why Rentmeester compares them to a checking account, not a growth asset.

27:36 - Why most cryptocurrencies could go to zero His 95%-to-zero estimate and the "buyer beware" framing.

29:02 - How investors can approach crypto risk His closing risk framework: custody, volatility and position sizing.

What Is the CLARITY Act? What Happens to Crypto Now That It Failed

Crypto headlines have been dominated by one piece of unfinished business in Washington: the CLARITY Act. Brett Rentmeester, founder and managing director of Windrock Wealth Management, walked Wealthion through what the bill actually was, why it stalled again, and what happens next, alongside a clip from Tom Lee, chairman of an Ethereum-holding company, on Wall Street's broader shift toward blockchain. These are the guests' attributed views; Rentmeester repeatedly flags this as risk education rather than advice, and his firm is part of Wealthion's advisor network.

What is the CLARITY Act, and why did it stall?

Its purpose was straightforward, if the politics were not: settling who regulates which cryptocurrency. Rentmeester explains that each token needed a clear answer to one question, is it a security regulated by the SEC, or a commodity regulated by the CFTC, since Bitcoin and Ethereum are already treated as commodities and other tokens sit in a grayer zone. Without that clarity, exchanges, institutions and investors have been operating in what he calls "the Wild West," with inconsistent enforcement even as grassroots interest kept the industry growing. Despite broad bipartisan support in the House a year earlier, the bill "was really dead on arrival" this time, falling short of the votes needed to even advance to further debate. Rentmeester points to two contributing factors: ethics concerns, a "political divide" over administration-linked crypto activity, and, in his view the bigger issue, an unresolved fight over stablecoin yield.

What are stablecoins, and why do they threaten banks?

Stablecoins are digital tokens designed to hold a steady value, typically pegged to the US dollar, functioning more like transactional money than a speculative asset. Rentmeester's own comparison is to a checking account: stablecoins are for spending and short-term holding, not for expecting growth, "I don't think it's a quote investment that you expect to go up a lot." The regulatory fight is about yield: some stablecoin issuers want to pay meaningful interest, which banks see as an existential threat to deposits. As Rentmeester puts it, "if stablecoins can pay all of this interest and we're only paying a fraction of that, all the money is going to leave the banks," and that tension between powerful banking and crypto lobbies is, in his telling, the main reason the CLARITY Act could not find a middle ground.

What happens to crypto regulation now that the bill has stalled?

Regulators are moving without it. Rentmeester notes one senator who voted no was, by his account, functionally a yes vote preserving the option to revive the bill later, possibly next year. In the meantime, days after the stall, the SEC and CFTC each issued their own findings: the SEC granted a multi-year exemption for exchanges working with tokenized assets, which Rentmeester says will "open the gates for banks and brokerage firms and all sorts of financial participants to start tokenizing assets," from cryptocurrencies to fractional shares of stocks settled instantly on a blockchain. He notes major exchanges are moving toward something closer to a 23-hour trading day, and reads the overall regulatory signal as supportive: an administration and agencies that want to encourage tokenization "within the right rules."

What is tokenization, and why is Wall Street moving toward it?

This is where the interview turns to a clip from Tom Lee, who is introduced as chairman of an Ethereum-holding company. Lee argues Wall Street has only recently embraced the idea that "the entire financial system is going to be built on blockchain rails," citing public statements from major finance executives, and frames the appeal as instant, 24/7 settlement without counterparty risk, the kind of speed and access crypto has offered natively for years. He also makes an unusual case for stablecoins as dollar-supportive rather than dollar-threatening: by giving people worldwide easier access to something pegged to the dollar rather than a volatile local currency, he argues stablecoins could extend the dollar's global reach and demand for short-term Treasuries even as the US grapples with its debt position. He separately points to AI agents as a coming source of crypto-rail demand, autonomous programs that may need to transact without the friction of opening a traditional bank account. His crypto commentary here is limited to this thesis; no specific holding of his is promoted in this segment.

How should investors think about crypto risk?

Rentmeester's framework is grounded in plain caveats. On security, he notes that ETFs tracking Bitcoin or Ethereum through a major brokerage remove much of the custody and cold-wallet risk that worried earlier investors. On volatility, he says an investor needs either the discipline to hold through 50% to 80% drawdowns without flinching, or a rules-based approach that trims into strength and adds into weakness around the well-known four-year Bitcoin cycle (tied to the "halving," when new Bitcoin issuance is cut in half). On the broader market, his estimate is blunt: "probably 95% of it will end up with no value," while a small share "might be society-changing," so he urges people to treat unfamiliar tokens as speculative, "buyer beware," rather than as investments. He is explicit that Bitcoin and Ethereum are mentioned "as examples of the industry, not recommendations," and repeats more than once that none of this is investment advice.

Is institutional adoption finally happening?

Rentmeester thinks this cycle looks different from the retail-driven waves of the past. He argues that what has been missing is not interest but regulatory clarity, and that the recent SEC and CFTC moves, plus the availability of exchange-traded funds on mainstream brokerage platforms, suggest the US is closer to sustained institutional participation than before, while cautioning that nothing is guaranteed and the space "is still a grand experiment." As always on Wealthion, this is the guests' attributed analysis, not personalized advice.

What Investors Should Watch

• Whether the CLARITY Act is revived: Rentmeester notes at least one senator's "no" vote may have preserved that option for a future session.
• SEC and CFTC tokenization rules: the exemptions already moving forward without new legislation.
• Stablecoin yield rules: the unresolved bank-versus-crypto lobbying fight at the center of the stall.
• The Bitcoin four-year cycle: whether a further washout occurs before the next phase, on the historical pattern Rentmeester describes.
• Institutional flows into crypto ETFs: a signal of whether adoption is broadening beyond retail cycles.

FAQ

What is the CLARITY Act? It was proposed federal legislation meant to clarify which US regulator, the SEC or the CFTC, oversees a given cryptocurrency, treating it as a security or a commodity respectively. Bitcoin and Ethereum are already treated as commodities. Despite earlier bipartisan support, it stalled in the Senate.

Why did the CLARITY Act fail? Brett Rentmeester points to two factors: ethics concerns tied to administration-linked crypto activity, and a larger, unresolved dispute over whether stablecoins can pay meaningful interest, which banks see as a threat to deposits.

What are stablecoins, and are they safe? Stablecoins are digital tokens pegged to a stable value, usually the US dollar, designed for transactions rather than growth. Rentmeester compares holding one to money in a checking account; safety depends on the issuer and the custodian, and he suggests using exchange-traded funds or reputable custodians to reduce that risk.

What happens to crypto regulation without the CLARITY Act? The SEC and CFTC have moved on their own, issuing exemptions that Rentmeester says will accelerate tokenization of assets by banks and brokerages, even without new legislation in place.

How should I think about crypto risk? Rentmeester's framework: use ETFs to sidestep custody risk, size positions you can tolerate seeing fall 50% to 80%, and treat most individual tokens as speculative, since he estimates roughly 95% may end up worthless. This is his attributed view, not personalized advice.

Full Transcript

Speakers: Maggie Lake (Wealthion host) and Brett Rentmeester (founder and managing director, Windrock Wealth Management), with a clip from Tom Lee, chairman of an Ethereum-holding company. ASR errors corrected (names, terms) and filler removed; meaning preserved. A mid-interview membership message has been noted rather than reproduced.

Brett Rentmeester (cold open): There's a lot of questions and a lot of eyes on this CLARITY Act that Congress failed to take up once again. People had high hopes for it, and it was really dead on arrival. If stablecoins can pay all of this interest and we're only paying a fraction of that, all the money is going to leave the banks. We think that's going to open the gates for banks and brokerage firms and all sorts of financial participants to start tokenizing assets.

Maggie Lake: Oil and bonds have been stealing headlines, but crypto has been staging a comeback. Bitcoin's back around 85,000, a high point for the year, and Ethereum has been rallying since August. What's going on?

Brett Rentmeester: Honestly, Bitcoin and Ethereum are doing what they've always done, massive rallies followed by sharp crashes that make everyone think the story is over, and then they come back from the ashes. The unique historical pattern is the four-year cycle tied to the "halving," when Bitcoin's new-issuance rate gets cut in half roughly every four years. Historically the high has come within about 18 months of a halving, followed by a rough 12-month stretch. We hit about 120,000 last fall and as low as roughly 58,000 this summer, and we're around 85,000 now, a strong rally off the summer low. On a long-term basis these look like reasonable entry points, though based purely on the historical cycle, not investment advice, some think there could be one more washout this fall marking a bottom. Patterns are never identical period to period, but if we are at or near a low, that should mark relative lows ahead of a more abundant multi-year period.

Maggie Lake: For people who own a little, or are wondering whether to add given how much we talk about diversification, the CLARITY Act failing again seems like a real headwind. Why does everyone care so much about it?

Brett Rentmeester: Let's set the scene. Crypto in the US has largely operated in a Wild West with little real regulation and inconsistent enforcement, sometimes going after companies doing things right while fraudsters elsewhere got away with more. Everyone, firms, entrepreneurs, investors, wants clear boundaries, and we haven't had that, even though grassroots interest kept the industry growing anyway. CLARITY was meant to settle, for each token, whether it's a security regulated by the SEC or a commodity regulated by the CFTC; Bitcoin and Ethereum are already treated as commodities. That distinction matters because very different rules apply to exchanges, institutions and investors depending on the answer. The bill had broad bipartisan House support a year ago, so expectations were high, but it was really dead on arrival this time, falling short of the votes needed to even move to further debate. It could come back, but that's not the path forward right now.

Maggie Lake: With that earlier bipartisan support, and clearer rules being something both crypto skeptics and advocates should want, what happened?

Brett Rentmeester: A couple of things. One is ethics: there's been a broader debate in Congress touching on things like insider trading, and specifically some ethical questions around administration-linked crypto activity, which made it more of a political fault line than before. But I think the bigger issue is the fight over whether stablecoins can pay yield. Stablecoins are meant to hold a steady value, typically pegged to the dollar, functioning as transactional tokens rather than a volatile asset like Bitcoin. Some stablecoin issuers want to offer meaningful interest, and banks are alarmed: if stablecoins can pay all of this interest and we're only paying a fraction of that, all the money is going to leave the banks, which is a real banking-system risk. Powerful lobbies on both sides haven't found middle ground on those rules, and that's a major part of the holdup.

Maggie Lake: You could read that cynically, banks protecting their turf, or more charitably, as genuine caution about unintended consequences for the banking system, which has gone off the rails before. You mentioned this isn't necessarily dead. Why?

Brett Rentmeester: The vote was close but fell short of advancing debate. One senator, Tillis, voted no in a way that, by most accounts, preserves the option to bring the bill back when the political climate allows, potentially next year. A federal law would have provided real permanence. In its absence, though, we have an administration and agencies that are, for the first time in years, genuinely supportive of crypto within appropriate rules. Two days after the bill stalled, both the SEC and the CFTC issued their own regulatory findings. The SEC granted roughly a five-year exemption for exchanges working with tokenized assets. In plain terms, that's likely to open the gates for banks, brokerages and other financial participants to start tokenizing assets, whether that's cryptocurrencies or fractional shares of something like Apple stock represented and instantly settled on a blockchain, rather than waiting days for a trade to close. Major exchanges are already moving toward something closer to a 23-hour trading day, several days a week. This is essentially what crypto investors have had for a decade, fractional ownership and instant settlement, and Wall Street now has a regulatory path to bring that in. [Membership message noted.]

Maggie Lake: That's a massive potential shift. We caught up separately with Tom Lee, who chairs an Ethereum-holding company and has been bullish for a long time; he described this in almost revolutionary terms. Let's listen to that clip.

Tom Lee (clip): Only in the last year and a half have we seen Wall Street embrace blockchain, tokenized securities, stablecoins, and the idea that you're rebuilding the entire rails of finance on crypto. Vlad Tenev has said very directly that he thinks the entire financial system is going to be built on blockchain rails, and Larry Fink at BlackRock has said something similar. You may think that's further down the road than it sounds, but the direction, and tokenization fitting into it, is a genuinely big shift.

Maggie Lake: Do you agree with that framing?

Brett Rentmeester: Absolutely. People in crypto and technology have long argued our financial infrastructure is outdated. Markets already trade around the clock in spirit, so why not make settlement instant and continuous with no counterparty risk. Stablecoins add an interesting wrinkle: think of a checking account you use for day-to-day spending versus dollar-denominated savings you park longer term. Stablecoins look more like that checking-account layer, meant for transactions where you want the value to hold steady. For a long time crypto was framed as an alternative to the dollar; stablecoins flip that somewhat, since giving people worldwide easier access to something pegged to the dollar, rather than a weaker local currency, actually extends dollar demand, including for short-term Treasuries, even amid concerns about US debt. In much of the world people would still rather hold something dollar-pegged than their own currency, so this stablecoin framework may help extend the dollar's reach even as it addresses some of the stresses in the bond market.

Maggie Lake: That's the borderless, liquidity-optimizing angle people keep coming back to. For someone wondering whether to get exposure to stablecoins specifically, how would they even do that? Is it through the usual cryptocurrencies, or something else?

Brett Rentmeester: A stablecoin itself is more like holding a dollar in a checking account than a growth investment; I don't think of it as a quote investment that you expect to go up a lot, more a transactional utility, useful for quick, seamless settlement. Some investors instead look at the public or private companies issuing stablecoins as a potential investment; that's an avenue people can consider, not something I'm specifically advocating one way or the other. If someone wants exposure to assets that might do better against the dollar over time given ongoing money printing and budget pressures, that's really a different conversation, pointing toward things like Bitcoin or Ethereum rather than a stablecoin itself. It's worth thinking of the crypto universe now in distinct segments: stablecoins as transactional, dollar-based tools; long-term store-of-value assets, which is how many people think of Bitcoin; and smart-contract or business-utility tokens. It's more varied and specialized than the single word "cryptocurrency" used to imply.

Maggie Lake: You also look at the intersection with AI.

Brett Rentmeester: Yes. AI has moved from simple question-and-answer tools toward autonomous agents that can carry out multi-step tasks. An agent that knows your travel preferences might not just search for a good deal but eventually book it and make a payment on your behalf. Agents like that will need to transact and secure funds without going through a multi-day bank account opening process, so they're likely to operate on crypto and stablecoin rails. It points toward a future where AI agents handle meaningful commerce using crypto-based payment infrastructure behind the scenes.

Maggie Lake: For clients newer to crypto, what concerns come up most? We still see hacks, scams and stories about lost cold wallets.

Brett Rentmeester: Those concerns are legitimate; it's a complex space, and self-custody or dealing with smaller exchanges carries real risk, buyer beware. For most people, the practical answer is finding a custodian or exchange with safety practices you trust, or simply buying an exchange-traded fund tracking Bitcoin, Ethereum or similar assets through a mainstream brokerage, which removes most of the custody risk entirely. That option didn't really exist a decade ago. The other major concern is volatility. We've been through several of these cycles, and I think you need one of two mindsets: either buy an amount you can tolerate seeing fall 50% to 80% and hold through the cycle without getting cute, or layer in some basic discipline, trimming near what history suggests is a cycle peak and adding back after a washout. None of this is investment advice, and cryptocurrency remains something of a grand experiment, but the broader case some people make is that with concerns about currency debasement across the US, Europe, Japan and China, and a persistent inability to balance budgets, there is demand for an asset some believe can hedge against that, and Bitcoin is the one most people point to.

Maggie Lake: Are we finally seeing the institutional adoption people have anticipated for years, or does that still swing with the cycle?

Brett Rentmeester: Historically it's swung with the cycle, driven heavily by retail investors who tend to buy at the top of the hype and abandon the asset after a washout, which is the classic difficulty of actually selling high and buying low in practice; having an advisor or institution involved can help remove some of that emotion. This cycle does feel closer to real institutional adoption: ETF sponsors, mainstream brokerage access, and banks actively discussing participation. What had been missing wasn't interest, it was regulatory clarity, and I think we're on a path, barring something going wrong, where institutional adoption for stablecoin payments and related infrastructure keeps accelerating. We're still early, but in five years this conversation may feel as ordinary as asking whether a business needs a website.

Maggie Lake: Are you still mostly focused on Bitcoin and Ethereum, or do you look further into the ecosystem?

Brett Rentmeester: There are easily tens of thousands of tokens, and creating one doesn't mean it has value, it's still a bit of a Wild West. Over time you look for networks with real growth and developer support, and Bitcoin and Ethereum, which we mention as examples of the industry, not recommendations, still represent the majority of value in the space. We do look at a broader basket beyond those two for clients who want it, but we're not chasing hundreds of small tokens; a lot of it is low-quality, and I'd estimate probably 95% of it will end up with no value, while a small share might be genuinely significant. A lot of newcomers treat small, speculative tokens like a lottery ticket, which is really more like gambling than investing, so buyer beware and think carefully about what you're actually trying to accomplish.

Maggie Lake: It's similar to junior mining in some ways, plenty of risk, most projects don't pan out, and knowing the people and track records behind a project probably matters here too.

Brett Rentmeester: That's right, it's a risk-return decision, and retail money sometimes gets an unfair reputation mainly because people chase lottery-style payoffs. If you're interested in this space, find trusted voices to follow, start with a small amount you can afford to lose, use custodians or platforms you're comfortable with, and talk it through with an advisor to get grounded, well-informed questions before committing more.

Maggie Lake: Brett, great timing for this conversation. Thank you so much.

Brett Rentmeester: Great seeing you, Maggie.

If you want a professional read on how your investments, you can request a free portfolio review from an advisor who understands real assets at https://www.wealthion.com/advisors/.

This article is educational and is not investment, tax, or legal advice. It does not recommend any security. Advisory services are provided by Greylock Peak Investments, LLC, a subsidiary of Wealthion. Wealthion is compensated for advisor introductions; see the Solicitor's Disclosure Document, ADV Part 2A and Form CRS. That arrangement does not influence editorial coverage.