"Once we get past the midterms, it’s over"… U.S. Treasury secretary underscores the 'golden window' for the CLARITY Act

As volatility in the digital-asset (cryptocurrency) market has recently intensified, U.S. Treasury Secretary Scott Bessent urged swift passage of the “Digital Asset Market Clarity Act (the CLARITY Act)” to help stabilize markets.

On the 13th (local time), Bessent said in an interview with CNBC, “We are currently experiencing a historic (digital-asset) sell-off,” adding, “If the CLARITY Act passes at a time like this, it could bring significant relief to the market.” He also noted that delays in advancing the bill—stemming from concerns raised by executives in the digital-asset industry—are weighing negatively on the market.

Bessent stressed that, given the political uncertainty of this year’s midterm elections, there is little time left in the legislative “golden window.” “If Democrats take control of the House, the possibility of reaching a deal on the bill will evaporate,” he said, arguing that “as soon as possible—by this spring at the latest—we need to pass the bill and secure President Donald Trump’s signature.”

At present, House Republicans hold 218 seats, narrowly ahead of Democrats’ 214. Joe Doll, former general counsel at Magic Eden, said, “In U.S. midterm election years, the balance of power in Congress typically tends to shift.” Ray Dalio, founder of Bridgewater Associates, also warned in January that “if President Trump’s policies are not codified into law, they could be weakened in this midterm election and reversed in the presidential election the year after next.”

Prediction markets are also pricing in a shift in the political landscape after the upcoming midterms. According to Polymarket, 47% of traders expect the two parties to split control of the House and Senate in this year’s midterms. The odds of Democrats winning both chambers were tallied at 37%.