The cryptocurrency market saw another eventful day as regulatory uncertainty in the United States weighed on investor sentiment, security experts warned about broader risks exposed by the Coldcard hardware wallet vulnerability, and Strategy confirmed it will maintain its preferred stock dividend despite shares continuing to trade below par value.
Bernstein Warns CLARITY Act Delay Could Pressure Crypto Markets
Global wealth manager Bernstein has cautioned that failure to advance the CLARITY Act before the U.S. Senate begins its summer recess could trigger another wave of weakness across cryptocurrency markets.
According to Bernstein analysts, the market may react negatively if lawmakers are unable to pass the landmark digital asset legislation, as investors continue to seek greater regulatory certainty in the United States.
The firm believes Bitcoin and the broader crypto market could experience another short-term decline if the bill stalls, although it expects conditions to improve later this year.
Bernstein forecasts that digital assets could begin recovering during the late third quarter and early fourth quarter, particularly as markets look ahead to the U.S. midterm elections.
Despite warning of potential short-term volatility, the firm also noted that legislative delays could encourage U.S. regulators to become more proactive.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) may accelerate guidance under Project Crypto, an initiative designed to establish practical digital asset regulations while Congress continues debating comprehensive legislation.
Analysts believe regulators could issue additional guidance covering token classifications, decentralized finance (DeFi), securities treatment, and innovation exemptions for blockchain projects.
Kraken Says Coldcard Vulnerability Exposes Industry-Wide Security Gap
Meanwhile, Kraken Chief Security Officer Nick Percoco said the recently disclosed Coldcard hardware wallet vulnerability has exposed a broader weakness in how cryptocurrency hardware wallets are independently tested.
The flaw, which remained undiscovered for nearly five years, affected the wallet’s seed-generation process by reducing the randomness used to create private keys.
According to Percoco, the incident demonstrates that current security audits often verify whether the intended random number generator exists but fail to confirm that production firmware is actually using the approved source of entropy.
He argued that this creates a significant blind spot for hardware wallet security.
Percoco called for independent end-to-end validation of hardware wallet firmware, comparing the digital asset industry with sectors such as banking and government cryptography, where rigorous external testing is already mandatory.
His comments come as investigators continue tracking the Coldcard exploit, which has reportedly affected more than 4,500 wallets and resulted in approximately $90 million worth of Bitcoin being stolen.
The incident has renewed calls for stronger security standards across the self-custody ecosystem.
Strategy Keeps STRC Dividend at 12%
In corporate news, Strategy confirmed that its preferred STRC shares will continue paying a 12% annual dividend for August despite the shares continuing to trade below their $100 par value.
Executive Chairman Michael Saylor announced that the dividend would remain unchanged, marking the second month in which STRC investors will receive payments under the company’s recently adopted semi-monthly dividend schedule.
STRC shares ended July at $89.46, still trading below their target value despite posting a modest monthly gain following a dividend increase implemented earlier this summer.
Management has previously stated that its long-term objective is to stabilize the preferred shares closer to their $100 issue price.
Investor attention also shifted toward Strategy’s Bitcoin treasury after Saylor posted another of his now-familiar social media messages hinting at a potential update regarding the company’s Bitcoin holdings.
The post, which included the phrase “Bitcoin Drive engaged,” has fueled speculation that Strategy may announce another Bitcoin purchase, continuing its long-standing strategy of expanding one of the world’s largest corporate Bitcoin reserves.
Markets Continue Watching Regulation and Institutional Activity
The day’s developments highlight two of the most influential themes currently shaping the cryptocurrency industry.
On one hand, investors remain focused on regulatory progress in Washington, where the future of the CLARITY Act could significantly influence market sentiment and institutional participation.
On the other, the Coldcard vulnerability has intensified discussions around security standards for self-custody solutions, while corporate Bitcoin accumulation strategies continue to attract attention as companies like Strategy maintain their long-term commitment to digital assets.
As regulatory decisions, security improvements, and institutional adoption continue to evolve, these developments are expected to remain key drivers of crypto market sentiment in the months ahead.
