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Three Bitcoin Failures That Could Trigger a Rally

CLARITY failed politically, BIP-110 failed socially, and Coldcard failed technically. But resolving all three uncertainties may ultimately prove bullish for price.

Bitcoin & Markets | August 10, 2026

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Three Wrongs Make A Right

I know it’s boring in bitcoin land right now. But several things are coming together that have the potential to trigger a rally.

CLARITY

First is the effective failure of the CLARITY Act. Many people claimed that once it passed, a bitcoin bull market could begin. But that’s not how markets work. Yes, CLARITY would be a fundamentally bullish development, but the market wasn’t going to wait for the president’s signature before pricing it in.

All year, I’ve said that price would tell us the likelihood of CLARITY passing. It never priced in success.

But the failure of CLARITY is not necessarily bearish, either. It was a major source of uncertainty all year. There were hundreds of financial-media appearances and public comments claiming it was going to get done. Prediction markets told a very different story, however, reflecting the considerable uncertainty surrounding the bill.

Its failure therefore represents a significant reduction in uncertainty. The prediction markets were right, and politicians suck. We have essentially confirmed what we already suspected and what the market had already priced in. The only meaningful difference today is that the uncertainty is gone.

BIP-110

Second is the failure of BIP-110. I didn’t follow this drama closely, but I know it was a major issue within the strong remnant of the Bitcoin community that still cares deeply about consensus and network governance. It became a significant social event because it involved several influential early bitcoiners, including Luke Dashjr, who played an important role in the SegWit activation battle.

The BIP-110 fork launched and was effectively dead on arrival. Its alternative chain reportedly produced only two blocks before stalling.

That matters because contentious forks create uncertainty even when they have little chance of succeeding. Markets don’t like uncertainty about which chain, rules or software the community will ultimately recognize. BIP-110 forced the issue into the open, tested its actual support and failed. The threat was transformed from an unresolved possibility into an observable failure.

In other words, Bitcoin’s social consensus was tested, and the network moved on.

Coldcard

Third, the Coldcard hack produced a major adrenaline spike. Emotional panic is one of the hallmarks of a market bottom, and the Coldcard exploit may have simulated part of that final panic without requiring another massive price collapse.

The hack attacked something even more important than price: confidence in self-custody. People who believed their bitcoin was safely stored suddenly had to confront the possibility that it could disappear without warning. That produced fear, anger and a renewed wave of skepticism toward Bitcoin itself.

But it also created replacement demand. Some victims who lost bitcoin will try to rebuild their positions. Other Coldcard users are moving coins, replacing compromised seeds and reconsidering how they store their bitcoin. The event forced holders to act instead of remaining passive.

The total replacement buying will not be enough to move the market on its own. That isn’t the point. The hack created the kind of concentrated emotional shock and forced activity that often occurs near important lows.

CLARITY failed, removing a major political uncertainty. BIP-110 failed, removing a source of network uncertainty. Coldcard failed, producing an emotional shock and new replacement demand.

Three wrongs might finally make a right.

That's it for this short update. Thanks for your support, and please share this with anyone you think would find it valuable.

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