Macro News: Crypto Markets Rally on CLARITY Act Hope Amid Fragile US-Iran Ceasefire

Crypto and stock markets rallied throughout the week after a tense ceasefire between the US and Iran held, and Wall Street demonstrated its growing attraction to cryptocurrencies through the deployment of fresh capital in Bitcoin and Ethereum spot ETFs.

Beyond the daily headlines, there is a deeper phenomenon at play, one that showcases crypto’s resilience, its asymmetrical response to geopolitical events, and the markets’ increasing strength sourced from positive developments on the regulatory and institutional investment front.

CLARITY Act Progress Aligns with Institutional Investor Demand for Crypto

Data shows that institutional investors turned green on crypto again, and progress on the CLARITY Act accelerated to the extent that even US Secretary of the Treasury Scott Bessent wrote a lengthy opinion in The Wall Street Journal calling for Congress to act without delay.

Adding to the conversation, Coinbase CEO Brian Armstrong, Wyoming state Senator Cynthia Lummis, and many other crypto founders have openly called for a push to get the bill over the hill and to President Donald Trump’s desk.

On April 8, Morgan Stanley launched its spot Bitcoin ETF with a 0.14% expense ratio, the lowest administrative fee among all BTC ETFs. The ETF pulled in $34 million on its first trading day, leading Morgan Stanley head of digital asset strategy Amy Oldenburg to tell Bloomberg Markets that it was “our best first day of trading for any of our ETFs since we started the ETF product line a few years ago.”

Strategy reinforced the “institutions are back" narrative with its April 6 announcement that it had acquired 4,871 Bitcoin (BTC) for $329.9 million, according to an 8-K filing from the US Securities and Exchange Commission.

The purchase brings Strategy’s total Bitcoin holdings to 766,970 at an average purchase price of $75,694. Beyond its first purchase of the month, Strategy outlined plans to acquire a total of $21 billion in additional Bitcoin through its Stretch (STRC) stock offering, and the company intends to use future MSTR stock offerings to buy another $21 billion tranche of BTC.

ETF Inflows Return — Will Altcoin Season Follow?

By April 9, the spot Bitcoin ETF inflows had reached $829.49 million, confirming that institutional investor demand is back despite mounting geopolitical and macroeconomic headwinds against Bitcoin and Ethereum (ETH). Ether’s spot ETF total net inflows also topped $85 million on April 9.

Further proof of crypto’s steady rebound is evident in aggregate crypto market capitalization data.

Total crypto market capitalization, excluding BTC and stablecoins. Source: TradingView

On April 10, the total market cap of altcoins (excluding BTC and stablecoins) has increased by 15.7% to $695.4 billion, while the Bitcoin market cap has risen to $1.46 trillion, up from $1.25 trillion — a 17% increase since Feb. 5.

Outside of TradFi, Convictionless Consolidation Defines the Trend

From a technical point of view, the market remains in a consolidation phase — a natural part of the bottoming process — but capital flows, order book structure, and recent buying demand from corporate and institutional investors indicate that equilibrium is settling in.

According to Hyblock CEO Shubh Varma, “following the post-drawdown consolidation, the market has entered a re-engagement phase, with both open interest and perpetual CVD trending higher, signaling renewed participation and early signs of FOMO-driven positioning.”

“Margin usage between longs and shorts remains balanced, indicating a lack of strong directional conviction. This suggests the market is active but still in a state of uncertainty, with no clear edge or crowded positioning yet established.”

Bitcoin’s inability to overcome sellers during rallies to its range highs ($70,000 to $75,000) and traders’ reluctance to sustain directional positions in the spot and perpetual futures markets expose the soft underbelly of a consolidating market.

Comparing the futures markets’ aggregated open interest, funding rate, and spot volumes from Feb. 6 through April 9 (red box on the right in the chart below) to the readings seen from September through October 2025 (red box on the left) proves the point. The aggregated futures market open interest stood at $37 billion before the Oct. 10, 2025, crash, and the metric has been pinned below $20 billion since Feb. 5.

According to 1971 Capital CIO Brian Russ:

“In the short term, positive catalysts like the resolution of the war in Iran and the CLARITY Act are likely to produce short rallies that won’t hold. Failed rallies on good news are a classic bear market indicator, and what I expect we will see.”

Bullish Continuation Hinges on Peace in the Middle East

The primary question on most investors’ minds is: Will the limited peace in the Middle East end the bears’ stranglehold on crypto prices, or will the ceasefire fall apart and result in Iran resuming attacks on its Gulf State neighbors that could spill over into Big Tech?

Iran has already demonstrated the capacity and willingness to strike data centers, AWS centers, oil pipelines, and LNG production infrastructure, which has a direct negative impact on equity markets, energy markets, and the broader global economy. So, if the ceasefire fails, they may resume this tactic in the future.

Traders would do well to remember that liquidations driven by war can be dual-pronged, and this dynamic is likely to have a long, rippling impact on markets that extends through Q3 and Q4 of 2026.

Beyond war-related headlines, investors will be watching to see if the success of Morgan Stanley’s spot Bitcoin ETF launch, the upcoming Schwab crypto products, and the collective positive net flows into the Bitcoin and ETH ETFs translate into increased demand in spot markets and a sustained rally in the crypto market.

Would passage of the CLARITY Act and a signature from the Oval Office open the gates for banks, brokerages, and crypto-payment-focused companies to launch new stablecoin initiatives that translate to fresh capital flows and bullish positioning across the crypto majors?

A handful of these pressing questions may be answered this week.