Bernstein warns crypto valuations slide as CLARITY Act stalls; prediction markets see 31% chance. Banking opposition and Senate calendar block progress.
Alpha Score of 52 reflects moderate overall profile with moderate momentum, poor value, moderate quality, strong sentiment.
The Senate’s summer recess is days away. Bernstein analysts said Bitcoin and other crypto assets could see valuations slide if the CLARITY Act does not advance before lawmakers leave town. The wealth-management firm expects market momentum to stay weak until late Q3 or early Q4.
Prediction markets now give the Digital Asset Market Clarity Act a 31% chance of passage this year, with about $3.7 million wagered on that outcome. Galaxy Digital cut its own estimate to 50% in late June, citing the Senate’s tight calendar. That probability has kept sliding since.
The bill would set a clear legal framework for digital assets, covering token classification and rules for decentralized finance platforms. Banking industry opposition has blocked progress. Banks argue the current draft would let crypto firms offer stablecoin yields without the same oversight traditional financial institutions face. That tension has found sympathetic ears in the Senate.
The timeline is tight. The Senate recess starts in early August, leaving little room to push a complex bill through. Bernstein analysts said they expect regulators to act if Congress punts.
The SEC and CFTC could move through Project Crypto, a joint initiative launched in July 2025 by SEC Chairman Paul Atkins. The project would use existing agency authority to issue guidance on token classification and DeFi rules. Bernstein’s report said regulators could speed up rulemaking and issue interpretive releases, carving out innovation exemptions for certain token issuances.
A separate ethics proposal from Senator Thom Tillis and Democrat Ruben Gallego is also eating up political bandwidth. The White House is reviewing a plan that would let state attorneys general enforce ethics laws against federal officials if the DOJ fails to act. That distracts from crypto legislation.
Banking opposition continues to slow the bill. Critics of the current draft say it creates an uneven playing field. No revised draft has surfaced yet.
Bernstein expects the market to stay choppy until there is some resolution, legislative or regulatory. The firm sees late Q3 to early Q4 as the earliest period for a sentiment shift. Prediction markets give the bill a 31% chance.
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