Bitcoin
CLARITY Act failure could send crypto valuations lower: Bernstein
Wealth manager Bernstein warns that Congress' failure to pass digital asset legislation risks triggering a market downturn.
With the US Senate set to begin summer recess at the end of the week, the likelihood of passing the Digital Asset Market Clarity Act (CLARITY) is fading, according to Bernstein analysts. The firm expects an immediate negative market reaction if the legislation fails, potentially triggering another decline in Bitcoin and broader cryptocurrency valuations.
Bernstein nonetheless notes a potential silver lining. Should the Senate fail to act, regulators including the Commodity Futures Trading Commission and Securities and Exchange Commission may accelerate their own rulemaking through Project Crypto, a joint regulatory initiative launched in 2025. The agencies could issue clearer interpretive guidance on token classification, decentralized finance rules, and innovation exemptions for new token issuances.
Prediction market traders have grown increasingly pessimistic about the legislation's chances. According to Polymarket data, the odds of the CLARITY Act passing before the end of 2026 have fallen to 31%, down from 40% a month ago, with approximately $3.7 million wagered on the outcome.
Bernstein's tactical outlook suggests the crypto market could bottom in late Q3 or early Q4, building momentum ahead of the mid-term elections.
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