U.S. Senate Speeds CLARITY Act Push as Crypto Market Seeks a Turnaround

U.S. Senate Steps Up CLARITY Act Drive

Outlook for Passage This Year Remains Split

Passage Could Lift Sentiment and Reverse Market Mood

The U.S. Congress is accelerating work on the CLARITY Act, a market-structure bill for digital assets, raising questions about whether it can help reverse sentiment in a sluggish crypto market.

On July 22, Republican Senator Cynthia Lummis, who is leading negotiations on the CLARITY Act, released an amendment containing an ethics provision that would bar the president and senior federal officials from issuing or endorsing crypto assets. Violations would allow the U.S. Department of Justice to impose fines of up to $250,000 per day.

Democrats have objected, arguing the ethics provision in the amendment is ineffective. That same day, seven Democratic senators, including Angela Alsobrooks, Ruben Gallego and Cory Booker, opposed the current amendment, citing concerns including the decision to give the Justice Department enforcement authority over the ethics provision.

Despite those differences, Republicans are moving ahead. Lummis said the amendment was not the final version and that additional negotiations would continue over the weekend, focusing on the ethics language. Senate Majority Leader John Thune has also said he would push for a floor vote next week even if no agreement is reached with Democrats.

Sluggish Crypto Market Looks to CLARITY Act as One of the Last Major Catalysts

The bill is drawing attention because the crypto market has recently struggled to find a clear upside driver. Bitcoin is trading around $65,000 this year, roughly 50% below the all-time high referenced in the article from last year. Renewed geopolitical tensions between the U.S. and Iran, along with the possibility of additional Federal Reserve rate increases, have weakened appetite for risk assets overall. As of July 24, Korea time, Bitcoin was trading at $65,485.48 on Binance's USDT market.

Against that backdrop, the CLARITY Act is effectively being viewed as one of the biggest remaining institutional catalysts of the year. The bill would clarify the regulatory authority of the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. Industry participants expect that if the bill passes, lower regulatory uncertainty could broaden participation from institutional investors.

Views Diverge on Passage This Year as Supporters See Sentiment Boost

Still, many are reluctant to be optimistic about the chances of passage this year. Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission, said there is more than a 50% chance the CLARITY Act will not pass this year. Thune has also struck a cautious tone on the odds of final passage before the summer recess on Aug. 7, saying the immediate goal is to begin deliberations.

Patrick Witt, the White House's adviser on digital-asset policy, offered a more optimistic view. He said Thune's remarks were hard to understand and that there was no need to rule out the possibility yet, given that the Senate will remain in session through the first week of August. A final vote in July may be difficult, he added, but meaningful progress could come in early August.

Jeong Min-kyo, an analyst at Presto Research, said the market is highly sensitive to expectations surrounding the CLARITY Act. On prediction market Polymarket, the odds of the bill passing this year are currently around 35%, and they briefly climbed to about 50% on related headlines before retreating, he said.

If the bill passes, it could improve sentiment in the crypto market in the short term and help reverse the mood after a stretch with few clear catalysts, Jeong said. Over the medium to long term, lower regulatory uncertainty and broader participation by institutional investors and traditional financial companies would also support the industry's structural growth.