Crypto Rallies Past Clarity Act Setback

Kalshi's Parlay Volume Called Inflated | Grayscale's Zcash ETF Plans Share Split

Marco Manoppo & Karon Pangestu
September 21, 2026

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Good Morning,

Friday's rally is a quiet vote of confidence that Washington's legislative gridlock no longer sets crypto's ceiling. With the SEC and CFTC both moving on rulemaking days after the Clarity Act stalled, bitcoin's reclaim of $80,000 looks less like a bounce and more like the market pricing in a regulatory path that doesn't need Congress at all.

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In Today's Email:

What Matters: Crypto Rallies Past Clarity Act Setback 👀
Product of the Week: Kalshi's Parlay Volume Called Inflated 🔎
Charts: Grayscale's Zcash ETF Plans Share Split, ZEC Shorts Get Crushed 📊

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Narratives: Regulators fill vacuum

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WHAT MATTERS

Crypto Rallies Past Clarity Act Setback

BTC/USD Price

State of play: Bitcoin reclaimed $80,000 and Solana and Hyperliquid jumped about 10% on Friday as the SEC and CFTC pressed ahead with crypto rulemaking, shrugging off the Clarity Act's Senate stall.

The CFTC filed its crypto asset rulemaking with the White House, a day after the SEC released its innovation exemption for onchain trading of tokenized stocks.
Pantera's Dan Morehead said regulators are delivering what Clarity would have anyway, and bitcoin bulls point to the Fed lagging on inflation.
Hyperliquid hit a record above $90 and launched manual borrowing, letting users post HYPE and BTC as collateral for stablecoin loans.
A House panel advanced the American Reserve Modernization Act, directing Treasury to maintain a secure bitcoin storage facility.
Kevin O'Leary said he's buying new crypto positions again, watching for a major stock exchange to adopt blockchain infrastructure.

Why it matters: Regulators moving without Congress shows agencies can deliver market structure clarity even when legislation stalls, reducing the industry's dependence on a single bill.

Our take: The rally suggests markets are pricing in regulatory progress as a substitute for Clarity, but agency rulemaking can be reversed by a future administration in ways an act of Congress can't.

For builders and investors: Watch the SEC's innovation exemption closely, since onchain tokenized stock trading could open a much bigger institutional pipeline than the Clarity Act debate ever addressed.

PRODUCT OF THE WEEK

Kalshi's Parlay Volume Called Inflated

A social media analysis alleges Kalshi's reported trading volume is largely inflated because its parlay products count potential payout multiples as volume rather than dollars actually wagered.

The analysis claims Kalshi reported $1.91B in volume on a day when only $136M was actually traded, a gap the poster attributes to parlay accounting.
Parlays reportedly make up 61% of reported volume, with a $1 bet on a 14.1x parlay counted as $14.10 in volume.
Nearly half of parlay volume, 48%, reportedly comes from slips with 11 or more legs, described as long-shot bets that rarely hit.
Extrapolated over a month, the claim implies roughly $57B in inflated volume versus $4B in real trading activity.
The poster suggests the accounting method may be intended to mislead investors, though this remains an unverified allegation, not a confirmed finding.

Other cool products:

DeFi Saver launches Morpho Midnight on Ethereum.
Kraken launches xStocks Vaults on Solana via Kamino.
Pareto launches first WBTC-denominated Credit Vault.
Payward builds permissioned Hyperliquid markets for US.
SWIFT provider launches Global Pay Connect via Chainlink CCIP.

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CHARTS OF THE WEEK

Grayscale Zcash ETF (ZCSH)

State of play: Grayscale's Zcash ETF, ZCSH, is undergoing a 3-for-1 share split after pulling in more than $233M in inflows since its late-August debut on the NYSE.

Shareholders get two additional shares per share held at the Sept. 28 close, with split-adjusted trading starting Sept. 30.
ZCSH held about $890M in net assets and generated more than $11B in cumulative trading volume as of Sept. 17.
ZEC hit an effective all-time high of $1,521 on Friday as the ETF rally continued.
Zcash's solrate climbed nearly 28% to just under 32 GSol/s since late August, with mining difficulty at a record high.
Rising competition is squeezing per-machine mining revenue even as ZEC's price rallies, since rewards are split among more miners.

Our Take: The split is cosmetic and just lowers the share price for retail access. The real story is mining capacity growing fast enough to squeeze per-machine economics even as ZEC rallies.

ZEC Shorts Get Crushed by 177% Rally

State of play: Zcash shorts are unwinding fast as ZEC surged 177.8% in a month, with one trader closing a position at a $10.68M loss and the largest open short now $33.87M underwater on Hyperliquid.

Lookonchain flagged the closed short before exit, a trader with 26 straight wins and an 89% win rate whose $9M profit flipped to a $1.57M loss.
Garrett Jin holds the largest open short, $33.87M underwater on 37,999 ZEC, though a $4.41M BTC long partly offsets the loss.
Other accounts show similar damage, including losses of $12.53M and $10.47M on separate leveraged ZEC shorts.
ZEC trades near $1,563, ranking ninth by market cap at $26.47B, as whales withdrew tens of thousands of ZEC from exchanges.
Zcash ETFs pulled in $98.2M for the week ending September 18, the largest inflow among 14 products, lifting assets 40.5% to $914.5M.

Our take: Squeezing even a trader with an 89% win rate suggests real spot and ETF demand behind this move, not just momentum. Still, $885M in open perp interest means volatility isn't over.

QUICK BITES

Polymarket faced $10M fraud attempt.
Gemini’s stock is down 80% from its IPO.
Visa to close Crossmint memecoin rewards loophole.
Bitcoin ETFs eke out positive week with $433M Friday inflow.
ZetaChain votes to shut down Layer 1 network and move ZETA to Solana.
Robinhood Chain fees collapse 97% even as transactions stay near record highs.
Kalshi faces ‘fake crypto volume’ allegations as critic flags identical $5,500 trades.

NOTEWORTHY READS & MEME

Greg’s read on AI-native services: a $100B opportunity.
Paul Klay’s read on why crypto VCs are going bankrupt.
Gabriel Saphiro’s read on 5 Ways of Tokenizing Securities.

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