Bernstein Says Crypto Could Fall Further if US Clarity Act Fails This Year

Bitcoin and the broader digital-asset market could face further declines if the Clarity Act, a US crypto market-structure bill, fails to pass this year.

CoinDesk reported on August 3 that Wall Street investment bank Bernstein said in a report that the chances of the bill passing this year are diminishing as time runs short before the Senate recess.

Bernstein’s market research team, led by Gautam Chhugani, wrote that the Clarity Act is the most important crypto market-structure bill in US history, but the odds of it passing this year are steadily shrinking.

The bank expects the crypto market to react negatively immediately if the bill fails to pass. Still, it said the impact would likely be temporary because the US Securities and Exchange Commission and the Commodity Futures Trading Commission could accelerate related rulemaking to narrow regulatory gaps.

Bernstein said the bill remains important over the long term because it would help define the boundary between securities and commodities oversight while encouraging blockchain investment by banks, asset managers and exchanges.

It added that the current downturn in the digital-asset market could end in late third quarter or early fourth quarter, and that additional policy support from the White House could help spark a rebound.