Bernstein Warns CLARITY Act Stalemate Could Hit Crypto Valuations

A stall would leave the United States without a statutory framework for crypto, prolonging the regulatory uncertainty that has weighed on the sector. That fog affects valuations most directly in tokens most exposed to classification risk – assets that could be labelled securities under current SEC guidance. Bitcoin and ether, widely considered digital commodities, are less vulnerable than smaller altcoins. Still, a broad sentiment shift would hit the whole market.

If Congress fails to act, an alternative path could accelerate. Bernstein pointed to "Project Crypto," a joint rule-making effort between the SEC and the CFTC. The project aims to clarify token classification and decentralised finance rules. It could align with the Trump administration's stated goals of U.S. leadership in digital assets, the firm said. Analysts have warned that delays risk ceding that lead. Project Crypto could provide an alternative, its timeline remains unclear.

The SEC and CFTC have not disclosed a timeline for Project Crypto. Any public signal that the agencies are fast-tracking the initiative could serve as a circuit breaker for declining prices. Until then, the August 7 recess creates a hard deadline. Every calendar day without a scheduled Senate vote reduces the probability of passage. The market will watch for whether either agency breaks its silence in the days after a potential legislative failure.