Here’s what you’ll find in today’s edition:

• A retired Congress member gives advice to an industry eager for regulatory clarity. So too does the CFTC chair.

• Why the outlook for Treasury yields remains unclear.

Engage now, or forever hold your peace

It wasn’t exactly surprising to hear speakers at yesterday’s Ondo Summit in Manhattan opine on crypto regulation/legislation. 

But beyond the post-election optimism we’ve heard plenty of, there was clear recognition of the ample work to do.

Former Congress member Patrick McHenry called Paul Atkins a “great choice for SEC chair.” But finalizing confirmations like his can be a months-long process, McHenry noted. Hence the potential “purgatorial state” of the SEC, if you recall from last week’s Forward Guidance.

Another months-long process: the “arduous” journey to draft and pass legislation, McHenry added. There’re hearings before lawmakers start to craft a bill. Then, getting it out of committee and bringing it to the floor. If passed in the House, it’s off to the Senate, which McHenry called “a completely different beast.”

At “breakneck speed,” a crypto bill could be signed on July 4.

“Or it could take 18 months,” he noted. 

Beyond timelines, McHenry encouraged the industry to engage with the folks in Washington. It’s now safe to do so, he argued — with the end of SAB 121 and Hester Peirce’s plans as key indicators.

Franklin Templeton’s Sandy Kaul knows all about engagement. Her firm has a whole team that does nothing but create FAQ materials and presentations for regulators.

“On one hand you’ve got to go very quick and be very open-minded and be very willing to disrupt yourself,” Kaul said during one panel. “On the other side, you really need to take the regulators on a journey with you and use your reputation as someone they trust to get them comfortable that it’s OK to move forward.”

CFTC Acting Chair Caroline Pham had her own fireside chat at the event. She noted the near-term deadlines laid out in Donald Trump’s executive order that the agency is working to meet. Pham mentioned, too, that the CFTC plans to bring aboard “crypto market structure experts” as senior advisers. 

The derivatives regulator today revealed an upcoming CEO forum (with Circle, Coinbase, Crypto.com and Ripple) to discuss the agency’s pilot program for tokenized non-cash collateral.

When asked how the industry can avoid squandering this opportunity for clarity, Pham urged sector players to come in with a “reasonable approach.” This will help close an unfortunate “credibility gap” spurred by some of the space’s fraudsters, she argued. 

Pantera Capital founder Dan Morehead said in a separate panel the industry is still getting used to the friendlier invitations to engage. 

“The rebels just threw the gates open, the sun’s beaming in and we’re all just still sitting there too afraid to be excited that it’s a new era,” Morehead mused.

But people shouldn’t be scared, McHenry stressed. And it’s key for the industry to take advantage of the momentum now.

“If we’re going to get something positive out of legislative or regulatory action, it will happen in the next 18 to 20 months,” he said. “That is open-field running; and if we miss this window, we’re going to be much worse off and we’re going to see people go back overseas.”

— Ben Strack

As the US financial system adapts to the rise of digital assets, institutional leaders are making their next big moves. What role will crypto play in global markets? How are fund managers positioning for the future?

At DAS NYC, you’ll hear directly from decision-makers at VanEck, Brevan Howard, and Binance as they unpack the evolving regulatory, macro, and investment landscape. From ETFs to onchain finance, these conversations will define the next era of institutional crypto.

Don’t just watch from the sidelines, be in the room where it happens.

📅 March 18-20 | NYC

The number of jobs the US economy added in January, falling short of the expected 169,000.

But we also found out the unemployment rate fell to 4%, outperforming the expected 4.1%. Some viewed this as a positive sign for the labor market amid ongoing economic uncertainties.

“With hiring slowing but the job market remaining stable, the Federal Reserve has less urgency to keep rates high,” 21Shares crypto research strategist Matt Mena said in a statement. “This sets the stage for bitcoin to benefit as investors position for a potential rate cut later this year.”

The US Treasury Department issued its quarterly refunding statement this week. As Felix alluded to yesterday, this is where officials announce their debt issuance plans for the coming quarter. 

The Treasury will be holding auction sizes steady “for at least the next several quarters,” the latest statement read. Treasury yields, in response, slid. 10-year yields were hovering around 4.5% Friday while the 2-year rose to 4.28%. 

Normally, higher yields mean lower stocks, like we saw in 2022 when the 10-year rose to over 4% and the S&P 500 ended the year almost 20% lower. 

In 2023, for most of the year, yields kept creeping up and so did US equities. It’s worth noting though that the S&P 500 doubled its annual gains during the final quarter of 2023 when the 10-year yield fell 0.5%. 2024 followed roughly the same pattern. 

Okay, history lesson over. That brings us to now. There’s really no reason to think stocks can’t maintain momentum with yields in the 4%-range, but if yields move too much higher, recessionary fears come back and stocks go down. 

The outlook for Treasury yields is uncertain for a few reasons. 

First, there’s the Fed hitting pause on its interest rate-cutting cycle, for who knows how long. Plus, inflation is still sticky. Rising tensions surrounding global trade and higher tariffs on US imports (if and when enacted more broadly) could also weigh on growth, or expectations for growth at least. 

Then there’s the Treasury’s new leadership. Secretary Scott Bessent hasn’t been shy about his distaste for how former Secretary Yellen handled things, namely her choice to primarily use short-term bills for funding. 

Long story short, it’s all pretty up in the air. But when the dust settles we’ll have all the info you need. Keep an eye on your inbox.

— Casey Wagner

• Blockworks’ Katherine Ross listened to the Operation Chokepoint 2.0 hearing held on Capitol Hill yesterday and wrote about it here. Coinbase’s Paul Grewal, after testifying, wrote on X: “Our financial system can’t improve while bureaucrats with unchecked power can stop the crypto services that banks and their customers want.”

• BTC surged above $100,000 earlier today but had retreated to around $97,750 by 2 pm ET — a 1.2% rise from 24 hours prior.

• A few more fascinating executive takes from yesterday’s Ondo Summit are likely to make it into future Forward Guidance editions. Stay tuned.