Bernstein Says CLARITY Act Is Advancing Further Than Expected, Positive Outcome Not Priced In

The CLARITY Act, a U.S. crypto market-structure bill, may be advancing further than expected, and the market has yet to price in a positive outcome, Bernstein said.

In a report cited by The Block on September 14, Bernstein said the bill appears more likely to advance than the market had expected last week. “A positive surprise is clearly not priced in,” the firm wrote. On Kalshi, the odds of the bill passing have recently moved back above 30%.

The view follows the release the previous day of Senate Republicans’ final draft of the CLARITY Act, which incorporated a broad range of Democratic demands. The final version included 126 substantive amendments requested by Democrats.

Notably, U.S. President Donald Trump accepted much of a bipartisan ethics framework. The draft requires public officials, including the president, to divest crypto holdings or place them in a blind trust. It also allows state attorneys general to enforce the related rules.

Lawmakers also added a provision aimed at addressing concerns from the banking industry. If payment stablecoins trigger large-scale deposit withdrawals from regional banks, the Treasury secretary would be able to activate a circuit breaker to temporarily restrict stablecoin redemptions.

Bernstein called the ethics package likely the best proposal realistically available. The firm added that because the White House also accepted enforcement authority for state attorneys general, it may still be able to win support from some Democratic lawmakers and continue negotiations ahead of the final vote.

A procedural Senate vote scheduled for September 15 is set to be the first key test. The cloture vote needed to move the bill forward requires 60 votes. Republicans hold 53 seats in the Senate, meaning they would need support from Democrats or independents even if every Republican votes in favor. Bloomberg reported that about seven to 10 Democratic senators appear to ultimately want the bill to pass.

Bernstein described this week as one packed with catalysts for the crypto market. Following the CLARITY Act vote, the Federal Reserve is also scheduled to announce its interest-rate decision on September 16.

Bernstein warned that a hawkish Fed decision combined with a failure of the CLARITY Act could trigger a “major drawdown” in the crypto market. At the same time, current positioning is tilted to the bearish side, meaning both digital assets and crypto-related stocks could see sharp moves depending on the outcome.

Even if the bill fails, that would not halt the broader effort to overhaul U.S. crypto regulation, Bernstein said. If the CLARITY Act stalls, rulemaking by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission could instead accelerate.