Ethereum is showing two signs of strength at the same time. One chart shows the first bullish SuperTrend flip in more than a year, while another shows $ETH still holding a long term support curve that keeps the $8,000 cycle target in play.
Ethereum SuperTrend Turns Bullish After More Than a Year
Ali Charts says Ethereum’s SuperTrend indicator has flipped bullish for the first time in over a year. The chart shows that shift clearly. $ETH is trading near $2,312, while the new buy signal appears around the $1,675 area after a long period of bearish trevnd signals.
Ethereum Daily Chart. Source: TradingView / Ali Charts on X
This matters because the SuperTrend indicator is designed to track broader trend direction, not small short term moves. On this chart, the last bullish phase led into Ethereum’s rise toward the $4,000 to $5,000 range. Then the indicator turned bearish near the top and stayed negative through the long decline and choppy recovery.
Now the signal has changed again. That does not guarantee a major breakout, but it does show that Ethereum has moved back above a level that had capped the trend for months. As long as $ETH holds above the flipped support zone, the chart supports a stronger medium term recovery case rather than another brief relief rally.
Ethereum Long Term Trendline Keeps $8,000 Target in View
James argues that Ethereum can still reach $8,000, and the chart shows why that view remains active. On the weekly chart, $ETH is sitting near a rising long term trendline that has supported the market through several major cycles since 2016.
Ethereum / U.S. Dollar Weekly Chart. Source: TradingView / James on X
That trendline is the key feature here. Ethereum has returned to it after failing to hold the higher range above $3,000. Even so, the chart does not show a full structural breakdown yet. Instead, it shows price testing a support curve that has remained intact across multiple years.
The $8,000 level on the chart is a long term upside marker, not a near term target. For that scenario to stay credible, Ethereum needs to keep defending the current trend support and then rebuild momentum from this area. If that happens, the broader cycle structure would still allow another leg higher. If support breaks decisively, the long term bullish case would weaken.
A new integration between LI.FI and Soneium have been announced to streamline access to decentralized finance (DeFi) yield opportunities for developers and teams. The partnership brings in LI.FI Earn as an infrastructure layer in the Soneium ecosystem, which provides a single platform to internally integrate yield onchain across many protocols and blockchains.
Something Soneium builders may find useful 👇@lifiprotocol Earn is a new infrastructure layer aimed at teams looking to integrate onchain yield capabilities. Rather than managing multiple vault integrations independently, teams may find value in a unified approach spanning 20+… pic.twitter.com/AAlnVIj4x7
— Soneium 💿 (@soneium) April 20, 2026
The shift is part of a wider trend in the industry to become more abstract with complex operations behind the scenes being simplified into single entry points to developers. Unlike having teams combine many extent vault protocols separately, LI.FI Earn provides access through a single interface and has minimal technical overhead.
Unified Access Across Chains and Protocols
LI.FI Earn is created to handle an assortment of 20 or more vault protocols and 60 or more blockchain networks, as well as one of the broader ecosystems of yield aggregation solutions available today. With the Soneium adoption, developers now have access to a plethora of yield opportunities without having to construct dedicated integrations per protocol.
Such a single-market strategy is especially timely in a disaggregated DeFi, where liquidity and yield platforms are fragmented across a wide variety of ecosystems. With LI.FI Earn, teams based on Soneium can provide users with a convenient entry point to these opportunities via a single entry point, enhancing their efficiency and experience.
Meanwhile, flexibility is also one of the basic elements of the system. Selection of protocol and user eligibility have full configuration, so that integrating teams can customize yield offerings to their application needs or compliance requirements.
Built-In Optimization Features for Developers
Beyond aggregation, LI.FI Earn also provides a variety of in-built capabilities which are designed to enhance the efficiency of transactions and minimize risk. These are gas estimation systems, slip protection systems, and automated structuring of transactions.
These attributes are essential in DeFi experience, where changing costs and asset prices can have important consequences on users. The implementation of these safeguards at the infrastructure layer, LI.FI Earn reduces the end user development work and increases end-user reliability.
This strategy is in line with the overall objective of Soneium to make blockchain development more approachable. Supported by Sony via Sony Block Solutions Labs Soneium is dedicated to empowering creators and developers to develop scalable, user friendly decentralized applications.
Seamless Cross-Chain Deposit Flows
A notable feature of the integration is how it can manage cross-chain deposit flows. Conventionally, users have to do several operations manually: swapping tokens, transferring assets between chains, and ultimately depositing the assets in yield protocols. The steps add friction and risk.
LI.FI Earn is an attempt to summarize all this in one flow that is handled at the infrastructure level. The system has automated the chain swap → bridge → deposit sequencing so that users are able to transfer the assets across chains and into yielding strategies with little effort.
This will not only increase user experience but also minimize chances of mistakes when making multi-step transactions. To developers, it does not require them to create intricate workflows but lets them concentrate on the essential features of the product instead.
Implications for the Soneium Ecosystem
The integration of LI.FI Earn makes Soneium a more developer-friendly blockchain solution. It reduces the cost of integrating DeFi, allowing more applications to gain access to yield generating features, including wallets, financial services providers and more.
With the increasing rivalry of blockchain ecosystems, improvements of this kind at the infrastructure level may be decisive in enticing developers. Easier access to cross-chain liquidity and yield strategies are also a major distinction that is becoming more prominent.
$ASTEROID’s extraordinary run changed the conversation. A token that sat at a $50,000 market cap before Elon Musk replied to a girl’s SpaceX mascot request briefly touched a $20 million market cap within hours and posted a 68,428% weekly gain according to CoinGecko data before pulling back roughly 40%.
The question traders are now asking is if $ASTEROID can do that, what moves next? Two tokens are being mentioned with increasing frequency in memecoin communities: Amaterasu Omikami (OMIKAMI) and RyuJin (RYU).
The Case for OMIKAMI and RyuJin
One expert who has covered OMIKAMI over three years pointed to the $ASTEROID move as evidence that the memecoin supercycle has further to run. His conviction is rooted in the longevity of both projects rather than short-term momentum.
Both tokens have been active for nearly two years with what the analyst describes as organic community growth rather than manufactured hype. The ecosystem is allegedly connected to Ryoshi, the pseudonymous figure behind Shiba Inu, though that attribution remains unverified and disputed within parts of the community.
OMIKAMI currently trades at approximately $0.007112 with a market cap of $6.73 million. RyuJin sits at $0.000000002961 with a $2.85 million market cap. Both the tokens are up by more than 13%.
The $ASTEROID Parallel
The analyst drew a direct comparison between OMIKAMI’s current position and where $ASTEROID sat before its viral moment. Both had a story. Both had a community. $ASTEROID had a single external catalyst that lit the fuse.
The structural difference is the nature of that catalyst. $ASTEROID moved because of a verifiable two-word reply from one of the world’s most followed public figures. OMIKAMI’s anticipated catalyst is expected to come from within the ecosystem itself, potentially a new communication from Ryoshi or a product announcement tied to a planned blockchain and debit card infrastructure the project has been developing.
The Broader Macro Setup
The analyst also said that the broader market context is constructive for memecoin activity. Bitcoin is retesting a breakout level on the four-hour chart and Ethereum is approaching key resistance. Both are approaching moves that have historically preceded altcoin and memecoin cycles.
The CLARITY Act, a potential new Fed chair and stablecoin yield legislation are all cited as macro catalysts that could inject significant fresh liquidity into crypto broadly.
$XRP price is at $1.4311 on April 20, as the 4H chart shows a symmetrical triangle reaching its apex simultaneously with a bearish MACD crossover, compressing an imminent directional resolution into the tightest point of the pattern.
$XRP ($XRP) price is at $1.4311 on April 20, down 0.13% on the 4H session, as a symmetrical triangle on the 4H chart compresses price between a descending upper trendline from the February highs above $1.90 and an ascending lower trendline from the March lows around $1.20. The pattern has reached its apex, and a directional resolution is now imminent. The 4H MACD has simultaneously printed a bearish crossover, with the histogram at -0.0032, adding a momentum signal that aligns with the descending upper trendline acting as resistance overhead. The MA ribbon is partially bullish: SMA 50 at $1.4018, SMA 100 at $1.3689, and SMA 200 at $1.3729 all sit below current price, but the SMA 20 at $1.4373 remains just above price and is acting as the first resistance on a 4H closing basis.
The 4H symmetrical triangle has been forming since the February peak at approximately $1.90, with the upper descending trendline connecting successive lower highs and the lower ascending trendline connecting successive higher lows from the March cycle lows. Volume has been declining throughout the compression phase, which is consistent with the typical symmetrical triangle structure and suggests an expansion of volatility is approaching as the apex closes.
The 4H symmetrical triangle defines the current $XRP price structure across the period from December 2025 through April 2026, with the converging trendlines now meeting at the current price level. The 4H MACD (12,26,9) has produced a bearish crossover inside the triangle at the apex, with the MACD line at 0.0021 crossing below the signal at 0.0052 and the histogram at -0.0032. Both lines remain above zero, which limits the severity of the bearish signal relative to a subzero crossover, but the directional shift at the triangle apex and SMA 20 resistance overhead is the most relevant nearterm momentum reading.
The SMA 20 at $1.4373 is the key technical level sitting just above price. Until $XRP closes a 4H candle above it alongside the upper triangle trendline, the bearish crossover is the operative 4H signal. A prior analysis published April 15 on crypto.news identified $1.50 as the primary target for an $XRP symmetrical triangle breakout, with the pattern’s measured move from the widest point of the triangle pointing toward that level. Technical convention states that symmetrical triangles resolve with a move equal to the height of the pattern’s widest part from the breakout point, and the widest portion of the current triangle measures approximately $0.25, placing the full measured target near $1.68 on an upside resolution from the $1.43 apex.
Key Levels: Support, Resistance, and Price Targets
The SMA 20 at $1.4373 is the first resistance above current price. A 4H close above it, alongside a close above the upper descending trendline, confirms the symmetrical triangle breakout and opens $1.50 as the immediate target. A sustained move above $1.50 brings the SMA 100 at $1.5625 into view as the next significant resistance in the extended bull case.
On the downside, the lower ascending trendline is currently near $1.37 to $1.38 on the 4H chart. A confirmed 4H close below the lower trendline breaks the symmetrical triangle structure and shifts the bias decisively bearish, exposing $1.30 as the next structural support. The lower trendline aligns with the Fibonacci 1.0 retracement level identified in prior daily chart analysis as the key floor below the current pattern. Below $1.30, $1.20 represents the last major demand zone before uncharted territory in the current correction.
Invalidation of the bull case: a 4H close below $1.37.
On-Chain and Market Data Context
$XRP perpetual futures open interest stands at approximately $2.48 billion per Coinglass, down sharply from the over $9 billion recorded in early October 2025. The substantial deleveraging of speculative positioning over the past six months reduces the risk of a cascade liquidation event on either a breakout or a breakdown from the current triangle apex, creating a cleaner technical setup than the crowded positioning of the prior quarter. The 4H volume of 11.04M $XRP on the current session is in line with recent sessions, confirming neither a strong conviction breakout nor a distribution event at the apex.
$XRP ETF inflows reached $17 million in the week of April 14, the strongest weekly inflow since early February, providing a structural demand tailwind that runs counter to the 4H MACD bearish crossover signal. The divergence between improving institutional demand and deteriorating 4H momentum at the triangle apex is the key tension driving the current directional uncertainty.
If $XRP closes a 4H candle above the SMA 20 at $1.4373 and the upper triangle trendline with expanding volume, $1.50 is the primary nearterm target with $1.5625 as the extended objective. A 4H close below the lower triangle boundary near $1.37 triggers the bearish resolution of the apex with $1.30 as the immediate downside objective.
Under the 2012 STOCK (Stop Trading on Congressional Knowledge) Act, congressional members and other government employees are mandated to report stocks, bonds, and cryptocurrency trades of over $1,000 within 45 days of executing them.
Here is a compilation of the top 5 crypto choices, and a few little-known extra choices:
Top 5 crypto choices in the US Congress
The first is Bitcoin ($BTC), the most widely held asset among legislators. Wyoming Senator (Sen.) Cynthia Lummis, a prominent speaker on crypto policy, disclosed her first Bitcoin purchase in 2013. Others who have made $BTC purchases include Sen. Ted Cruz and Representatives (Rep.) Byron Donalds and Guy Reschenthaler, with reports of individual holdings worth up to $250,000.
Other lawmakers, such as Rep. Sheri Biggs and Sen. Dave McCormick, have Bitcoin exposure through ETFs from Valkyrie, VanEck, and Ether. Meanwhile, a couple of others, such as Sen. Sheldon Whitehouse, have invested in Bitcoin-related companies, including PayPal, BlackRock, and The Block (formerly Square).
The second is Ethereum ($ETH), held by members of Congress such as Reps. Mike Collins and Barry Moore, with the former holding up to $60,000 in $ETH. Rep. Marjorie Taylor Greene and Sen. Dave McCormick have invested in Ethereum ETFs.
Third is Solana (SOL) and fourth is XRP, both reported by Rep. Guy Reschenthaler, and each valued at up to $15,000. Fifth is Cardano (ADA), disclosed by Reps. Barry Moore and Mike Collins, with the former holding a portion worth up to $45,000.
Little-known coins
While the above constitute the top 12 crypto coins by market cap, policymakers have also made some outlier investments. Rep. Mike Collins purchased the Ski Mask Dog (SKI), while Rep. Madison Cawthorn held and promoted the LGB Coin.
Other coins in this category include The Graph (GRT), Velodrome (VELO), and Aerodrome Finance (AERO).
In the past 24 hours, all these cryptocurrencies have gained between 1.8% and 4% following shifts in the geopolitical and macroeconomic environment.
Bitcoin price moved back above $76,000 on April 20 after a volatile weekend tied to developments in the United States-Iran conflict. The rebound followed a pullback toward $75,000 as traders reacted to renewed pressure in oil markets and fresh uncertainty around diplomacy.
Market attention also shifted after President Donald Trump said a new U.S. deal with Iran would be better than the 2015 nuclear agreement. That statement arrived as the current ceasefire approached its end and doubts remained over the timing of another round of talks. Against that backdrop, Bitcoin continued to trade as a macro-sensitive risk asset, with price moves shaped by oil, geopolitics, and positioning across derivatives markets.
Bitcoin Price Steadies After Weekend Pullback
Bitcoin price held above $76,000 after retreating from a failed move beyond $78,000. The earlier rise marked the asset’s highest level in about ten weeks before momentum faded into the weekend. Traders reduced risk as tensions in the Middle East returned to the forefront and oil markets turned higher again.
The weekend reversal reflected broader caution across global markets. Reports tied to the Strait of Hormuz and renewed friction between Washington and Tehran pushed crude prices back toward the $90 range. That added pressure to inflation expectations and weighed on assets that are sensitive to macro uncertainty, including Bitcoin.
Donald Trump Comments Shift Focus to Diplomacy
Donald Trump said on April 20 that the deal now being negotiated with Iran would be better than the Joint Comprehensive Plan of Action, the 2015 accord he exited in 2018. His remarks came after criticism from Democrats and some nuclear experts who questioned whether a complex agreement could be reached quickly. The comments added a diplomatic angle to a market already focused on oil supply and ceasefire risk.
At the same time, uncertainty around the next round of talks remained in place. Prospects for further negotiations in Pakistan were not clear as the two-week ceasefire neared expiry.
Oil Volatility Keeps Pressure on Risk Assets
Oil remained central to the market reaction. Reuters reported that the war and renewed disruption around Hormuz had helped lift global oil prices, with Brent and WTI both showing sharp gains. Higher energy prices can keep inflation concerns alive, which in turn can affect expectations for monetary policy and weigh on crypto demand.
Bitcoin’s recent trading pattern gave back part of its earlier rally as geopolitical headlines worsened and crude rose again. Even with the recovery above $76,000, traders continued to monitor whether the market could hold support if oil stays elevated and diplomatic progress remains uncertain.
Bitcoin Price Technical Levels
Market structure also pointed to continued volatility. The earlier move above $76,000 had forced out a large amount of bearish positioning, but the weekend retreat triggered another round of liquidations as traders adjusted to the new macro backdrop. Open interest and options positioning around the $75,000 area suggested that Bitcoin could continue to see sharp price swings in the near term.
Technical levels now remain important for the next move. Resistance sits near the upper $79,000 zone, while support was near $73,000 to $75,000.
The SEC is positioning its first year under Paul Atkins as a turning point toward clearer regulation and stronger markets. The SEC Chair described it as a historic year, stating the agency delivered on its promises.
Key Takeaways:
SEC emphasized regulatory clarity as key to stronger U.S. capital markets.
Paul Atkins framed his first year as historic, with a focus on innovation and growth.
NYSE event reinforced policy shift supporting crypto and market competitiveness.
‘It’s Been a Historic First Year as SEC Chairman’
A first anniversary appearance at the New York Stock Exchange (NYSE) highlighted the market impact of U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins’ policy shift. On April 20, the SEC, Atkins, alongside supportive lawmakers and fellow regulators, cast the milestone as reflecting a year shaped by regulatory clarity, stronger U.S. capital markets, and support for innovation, including crypto.
The SEC detailed that Atkins rang the NYSE opening bell to mark his one-year anniversary as chairman. The agency emphasized a shift toward regulatory clarity and a less enforcement-driven approach to crypto and other emerging technologies, while Atkins described the period as a “historic first year” focused on returning the SEC to its core mission of investor protection, orderly markets, and capital formation.
Commodity Futures Trading Commission (CFTC) Chair Mike Selig stated that the SEC had “ended regulation by enforcement” and supported “innovative technologies like crypto,” while pointing to closer coordination between the CFTC and SEC. That signals clearer operating conditions for digital asset firms in the U.S., as policymakers continue emphasizing innovation, competitiveness, and regulatory alignment.
Atkins was sworn in as the SEC’s 34th chairman on April 21, 2025, after President Donald Trump nominated him on Jan. 20, 2025, and the Senate confirmed him on April 9. The role marks Atkins’ return to the agency, where he previously served as an SEC commissioner from 2002 to 2008. During his current tenure, the SEC has signaled a more industry-friendly approach to digital assets through moves including support for its Crypto Task Force, the dismissal of civil enforcement actions against several crypto firms, and a broader push for clearer crypto guidance.
Atkins Ties Crypto to SEC Core Mission
The SEC chairman further stressed: “I promised a new day at the SEC when I came aboard … We’ve made huge progress,” he said, reiterating:
“When I took office 1 year ago, I promised a new day at the SEC. And we’ve delivered.”
“With our agenda to restore regulatory clarity, strengthen competitiveness, and accelerate innovation, we are making sure the U.S. remains the world’s strongest and safest place to invest,” he stated. Those remarks placed crypto within a broader market strategy while linking policy direction to competitiveness and investor safeguards.
Echoing that stance, House Financial Services Committee Republicans said on X that the SEC advanced policy changes aligned with innovation, stronger U.S. capital markets, and investor protection, adding that “Republican members look forward to continue advancing these efforts.”
Dogecoin shows a cup-and-handle pattern and a bullish divergence in the RSI, pointing to a potential breakout above $0.103.
The $TRUMP token expects volatility due to an event at Mar-a-Lago on April 25, while maintaining critical support at $2.77.
Pepe ($PEPE) leads the sector’s momentum with a weekly rise of 7.3%, facing decisive resistance at the $0.00000416 level.
The fourth week of April begins with an average growth of 8% for the memecoins segment; the marked lagging of the main assets suggests an imminent rotation of capital towards the leaders.
Currently, Dogecoin (DOGE) is trading near $0.09482, making sideways movements while the rest experience rallies. This technical understatement, combined with a clear positive divergence in the RSI oscillator, could skyrocket the price by 12% towards $0.115.
The market appears to be calm, but the formation of a “cup and handle” on the daily chart reinforces the analysts’ bullish thesis. If the buying volume passes the $0.095 barrier, it would confirm the start of a massive recovery phase for the largest meme cryptocurrency by capitalization.
Political catalysts and technical breakout structures
On the other hand, the price of the Official Trump ($TRUMP) token stands at $2.83 with a key event scheduled for this April 25. The gala organized for the main holders acts as a fundamental catalyst that has historically driven speculative demand for the asset.
Meanwhile, Pepe ($PEPE) shows an enviable technical setup called a “pattern within a pattern.” The asset is attempting to invalidate a long-term bearish channel by consolidating a handle just below its main resistance in the Fibonacci zone.
If $PEPE manages to close a daily candle above $0.00000416, it would trigger a measured move towards $0.00000526. This advance would represent a return close to 30%, consolidating its position as the asset with the best relative momentum of the analyzed group.
The memecoins market is going through a critical period of technical and fundamental reconfiguration. The combination of high-impact in-person events and signs of bearish exhaustion positions these three tokens as the indisputable protagonists of this weekly session in the crypto ecosystem.
Solana is pulling back into an area that now matters most for the short term trend. One chart shows price testing a micro support zone, while another keeps the bullish case alive as long as $SOL holds above the broader reversal area.
Solana Pullback Tests Key Micro Support Zone
More Crypto Online says Solana is moving toward a micro support zone while a broader wave two correction may still be in play. The chart shows $SOL trading near $83.53 after a pullback from the recent local high, with price now approaching the first key support area around $81.75 to $80.53.
Solana / U.S. Dollar 1 Hour Chart. Source: More Crypto Online on X
That zone matters because it lines up with several retracement levels shown on the chart. The structure suggests this drop could still fit a wave two correction if buyers hold support and price stays above $78.81. The chart marks that level as the deeper invalidation point for the current bullish interpretation.
At the same time, the rebound setup remains incomplete. $SOL has already lost the rising short term support line, which signals weaker momentum. Therefore, traders will likely watch whether price stabilizes inside the marked support band or continues lower toward the high $78 area.
If support holds, the chart leaves room for another move higher after the correction. If $SOL breaks below $78.81, the current wave count would weaken and the broader pullback case would gain more weight.
Solana Reversal Setup Keeps Bulls in Control
BitGuru argues that Solana has shifted from breakdown fears to a cleaner recovery structure. The chart supports that view. It shows $SOL rebounding after the late March decline, then moving into a consolidation phase before breaking higher and pulling back without losing the broader recovery shape.
The key point is support. Price rejected from the recent high near $90.95 and moved back toward the mid range area around $85. However, the chart still shows $SOL holding above the marked reversal zone near $82. As long as that area stays intact, the pullback looks more like a retest inside an uptrend than a fresh bearish breakdown.
The earlier fall from around $93.45 formed the base for this structure. Since then, Solana has built higher lows and pushed into a stronger range. Therefore, the current dip does not yet cancel the bullish case. Instead, it suggests the market is testing whether buyers can defend support after the breakout.
If $SOL holds this zone, the chart keeps the door open for another move toward the recent highs. If support fails, the reversal setup would weaken and the bullish structure would need to be reassessed.
If you are a bank, your core business model is quite elegant. You take people’s money, you pay them zero percent interest on their checking accounts, and you lend that money out to other people at five or seven percent interest. You keep the difference. This is a very good business, and if you have it, you will fight very hard to keep it.
The problem with paying your depositors zero percent is that eventually, someone else will come along and offer to pay them something. When this happens, you have two choices. You can raise your own deposit rates to compete, which costs you money and ruins your business model. Or you can go to the government and ask them to make it illegal for the others to pay interest.
Historically, banks strongly prefer the second option.
A stablecoin is a cryptocurrency pegged to the US dollar. If you give a stablecoin issuer a dollar, they give you a digital token, put your dollar in Treasury bills, and earn about 4%. Historically, stablecoin issuers have kept that yield for themselves. The obvious next step in the evolution of this product is that they share some of the yield with you, so that you will hold their token instead of leaving your money parked elsewhere.
Under $GENIUS, issuers themselves cannot pay yield to holders. The live CLARITY fight is whether affiliated exchanges, distributors, or rewards programs can share those economics with users in ways that are functionally equivalent to interest.
The banks do not care for this.
And so they are calling their senators. Congress has been locked in talks for months over a crypto regulatory framework — the $GENIUS Act last summer for stablecoin issuers, and now the CLARITY Act for everything else, including the question of what stablecoin players can do. Treasury Secretary Scott Bessent has publicly urged the Senate to move forward:
“Bogus butter” was the term used for oleomargarine.
Bettmann Archive
But the traditional banking lobby has demands first. According to Crypto In America reporter Eleanor Terrett, the North Carolina Bankers Association has been circulating a message, encouraging member banks to call lawmakers with this script:
“The CLARITY Act must include an airtight prohibition on payments for stablecoins acting as a store of value by clearly barring any interest or yield-like payments tied to the holding, retention, or balance of payment stablecoins — without carve-outs that can be met through nominal activity or loyalty programs.”
This is a masterpiece of the genre. What the banks are saying, in plain English, is: “We cannot stop stablecoins from existing, but you must legally mandate that they be worse than our products.” They want to ban anything “economically or functionally equivalent” to interest. We are the banks, we own the concept of interest, so you must stop the computer program.
It is also, as it turns out, a margarine law.
In 1869, a French chemist named Hippolyte Mège-Mouriès figured out how to make a cheap spreadable fat from beef tallow. Napoleon III wanted something to feed the army and the poor, and Mège-Mouriès gave him margarine. By the mid-1870s it had arrived in the United States, where it cost significantly less than butter and tasted, to an unaided palate, basically the same. This is the point at which the American dairy industry discovered that it could not compete on price or efficiency with a man who had invented butter in a factory, and so, like all industries that cannot compete on price or efficiency, it turned to the regulators.
By the turn of the century, more than thirty states had passed anti-margarine laws. The pitch was consumer protection: people could not be allowed to accidentally buy margarine while thinking it was butter.
Wisconsin farmers protest the usage and sale of ‘synthetic butter,’ otherwise known as oleo margarine which was made from vegetable or coconut oils, Madison, Wisconsin, circa 1930. (Photo by Underwood Archives/Getty Images)
Getty Images
The mechanism was, in retrospect, spectacular. New Hampshire and Vermont, among others, required margarine to be dyed pink. Not labeled pink. Dyed. The theory was that nobody will spread pink grease on bread, and therefore the product will be technically legal but commercially dead. This is an airtight prohibition without carve-outs that can be met through nominal activity. The Supreme Court struck down New Hampshire’s pink-margarine law in 1898, holding that it was “in necessary effect, prohibitory.”
So the states pivoted. They said: fine, you can sell margarine, but you cannot sell it yellow. Margarine is naturally white. Butter is yellow because cows eat grass. Without the color, the consumer will look at this tub of white grease and reject it. Commercially dead, but this time constitutional. The federal Margarine Act of 1886 added a two-cent-per-pound tax. The Grout Bill of 1902 raised it to ten cents per pound on yellow margarine while leaving uncolored margarine at a quarter of a cent.
Read the Grout Bill carefully. It does tax margarine — but it taxes margarine that resembles butter forty times more heavily. The regulated quantity is not just the product; it is the product’s resemblance to the incumbent product. Substitute “yellow” for “economically or functionally equivalent” and you are reading the March draft of the CLARITY Act.
The margarine industry did what industries do when regulators ban yellow. It shipped the product as a block of white margarine with a separate capsule of yellow dye. The consumer put the block in a bowl at home and worked the dye through with a wooden spoon. Generations of Americans spent the first half of the twentieth century sitting at their kitchen tables, performing a small act of civil disobedience every week to save thirty cents on butter. By the mid-1940s, Leo Peters had patented a plastic pouch with the dye capsule sealed inside, so consumers could pinch and knead the bag instead of mixing margarine in a bowl. This was considered a major innovation. If you are over a certain age, someone in your family may remember this.
Wisconsin kept its yellow-margarine restrictions until 1967, the last state to give up. Minnesota required public disclosure when oleomargarine was served in place of butter. Violations could carry criminal penalties. The point was not subtle: margarine could exist, but the law made restaurants announce the substitution.
Nobody was fooled. Everyone understood the point. The workaround became the product.
Eventually, World War II hit. Butter was heavily rationed, margarine was less so, and American households got so used to mixing the dye that they became much more comfortable substituting margarine for butter. Margarine outsold butter by 1958. The dairy lobby had spent eighty years successfully defending the legal definition of the word “butter,” and in the process had taught an entire country that you could mix your own yellow dye into a cheaper, longer-lasting, identically-functional spread and it would be fine. The carve-out became the industry. By the time Wisconsin gave up in 1967, margarine was not the substitute. It was the mass-market spread, and butter had become the luxury good.
In a strange coda, butter later won a different fight. By the 2000s, margarine’s trans-fat reputation had collapsed, and butter brands increasingly competed on provenance, fat content, and flavor — Irish grass-fed butter, European-style butterfat, cultured butter. The industry that had spent eighty years legislating against its substitute eventually won a different fight, the one no regulator had forced on it, which was to pay attention to what customers actually wanted.
This is the part where you may be nodding and assume the same thing will happen with stablecoins. Which it probably will. But there is a more recent and more financially precise version of this story, and it is even less flattering to the bank lobby, because the bank lobby is the one it happened to.
In 1933, the Banking Act prohibited banks from paying interest on demand deposits and gave the Fed authority to cap rates on savings deposits. This was Regulation Q. It was meant to prevent destructive rate competition and protect the community bank deposit franchise. It was airtight. It had no carve-outs. It was the closest financial ancestor of the regime the NCBA is currently asking Senator Tillis to enact for stablecoins.
In 1971, Bruce Bent and Henry Brown started the first money market mutual fund. It held short-term Treasuries and commercial paper. It passed the yield through to shareholders as “dividends,” because technically it was a 1940 Act registered fund and not a bank. It was functionally a checking account paying market rates, but formally it was a security, and Regulation Q regulated banks, not securities. In 1977 Merrill Lynch added check-writing and a Visa card and called it the Cash Management Account. By the early 1980s, money-market funds had become a $200-billion-plus industry. Today they hold more than $7.6 trillion. Deposit-rate ceilings were dismantled through the 1980s; the demand-deposit interest ban finally disappeared in 2011, seventy-eight years after the original prohibition.
The thing the banks wanted to protect in 1933 — their exclusive franchise over yield-bearing, dollar-denominated, liquid instruments — they lost to a wrapper that was technically not a bank. They did not lose it because of bad regulation. They lost it because the airtight prohibition trained an entire adjacent industry to build the same product in a form the prohibition did not cover.
So. Back to the NCBA sentence.
“Airtight prohibition” is a thing you can ask for. You will sometimes get it. The Oleomargarine Act of 1886 is an airtight prohibition. Regulation Q is an airtight prohibition.
What airtight prohibitions are very bad at is remaining about the thing they were written about. The margarine laws were about butter, until they were about teaching consumers that butter was optional. Regulation Q was about bank deposits, until it was about making money market funds a better savings vehicle for the American middle class. The prohibition works on the dimension the incumbent specified. The industry routes around that dimension. The resulting product is a version of the substitute specifically adapted to the contours of the prohibition. Which tends to make it better.
President Donald Trump signs the $GENIUS Act, a bill that regulates stablecoins, a type of cryptocurrency, in the East Room of the White House, Friday, July 18, 2025, in Washington. (AP Photo/Alex Brandon)
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The CLARITY Act fight is about whether a crypto exchange can pay yield on a stablecoin balance. The banks want airtight. They want no carve-outs met through nominal activity. They want no exceptions for novel loyalty programs or business models. They want an economic equivalence standard strong enough to catch any structure that has the effect of interest, even if it is formally something else. This is, one should grant, a coherent request. It is what a lawyer who understood everything about how margarine beat butter, and everything about how money market funds beat banks, would ask for. It is the prohibition you would draft if you had read the history.
And the reason it will not work is that the airtight prohibition is often the cause of the substitution. It is not the defense against it. The dairy industry did not lose to margarine despite the yellow-dye laws. It lost to margarine because of them. The laws created a product category — mix-your-own margarine — that consumers engaged with at their kitchen tables for fifty years. Regulation Q did not fail to protect banks from money market funds. Regulation Q was the reason money market funds existed in that form.
If the CLARITY Act passes with an airtight prohibition on anything economically equivalent to interest, the stablecoin industry will spend the next decade designing products that are formally something else. They will hand users a white stablecoin and a digital packet of yellow dye and let them mix the yield in at home — which is to say, they will build products specifically adapted to the contours of whatever the government agencies will jointly write in their rulemaking. And at the end of the decade, the bank deposit franchise will discover it has been competing not with stablecoin yield, which is easy to regulate, but with whatever the industry built instead.
A customer enters a Blockbuster store in Dallas, Texas, U.S., on Wednesday, Dec. 4, 2013. Blockbuster announced at the beginning of November that it would be closing all stores as well as ending domestic retail and DVD by mail services. Photographer: Mike Fuentes/Bloomberg
The deeper problem for the banks is that yield is not a side feature they’re defending. Their profit depends on paying depositors zero and earning five, and stablecoins-that-share-yield is specifically the product that breaks that model. This is Blockbuster and Netflix. In 2000, Blockbuster collected $800 million in late fees, which was sixteen percent of its revenue. The company was profitable because it was annoying. The famous story is that Reed Hastings started Netflix because Blockbuster charged him $40 for returning Apollo 13 late; Marc Randolph, his co-founder, has since admitted they made that up because it was the easiest way to explain the subscription model to the press. Which is fine. The story worked because everyone instantly understood what Netflix was selling. They were selling not-Blockbuster. That same year, Blockbuster had the chance to buy Netflix for $50 million and laughed them out of the room. In 2005, it tried to scrap late fees to compete. It could not figure out how to make money without them. It brought them back under a different name and filed for bankruptcy in 2010. The airtight prohibition is the version of that story where Blockbuster gets Congress to ban flat-rate subscriptions. Which is, in effect, what the banks are asking for.
NEW YORK – MARCH 17: People stand inside the offices of JP Morgan Chase on March 17, 2008 in New York City. (Photo by Michael Nagle/Getty Images)
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Not every bank is Blockbuster. The smart response to better rails is to use the better rails. JPMorgan has done exactly that: its deposit token JPMD — which can pay interest because it is a bank deposit rather than a stablecoin — launched on a public blockchain last year. Multiple banks are running similar tokenized-deposit products on their own private blockchains, which is a permutation of the same bet. The largest banks are not sitting this one out. They are building the product the NCBA wants Congress to ban. Which suggests the lobbying is less a strategy than a delay tactic — one that won’t save the banks running it, because the loudest banks in the lobbying fight may not be the banks best positioned to compete.
The White House Council of Economic Advisers published a paper two weeks ago arguing that a complete ban on stablecoin yield would increase aggregate bank lending by $2.1 billion — 0.02 percent of total loans. The American Bankers Association rebutted this by saying the CEA had studied the wrong question. On this one narrow point, the ABA is right. The CEA studied the current-scale lending effect of a prohibition. The relevant question is what happens in year twenty. The relevant comparison is not money market funds in 1972. It is money market funds in 2011.
The banks are welcome to get the airtight prohibition they are asking for. They should probably be careful what they ask for. The last time they asked for one, they got Vanguard. The time before that, somebody got Wisconsin.
