The future of the CLARITY Act is becoming increasingly uncertain as the U.S. Senate runs out of time before its summer recess. According to analysts at Bernstein, any further delay in passing the legislation could trigger another wave of selling across the cryptocurrency market before conditions improve later this year.
While Bitcoin and the broader crypto market have already faced recent volatility, Bernstein believes the industry’s next major move could depend heavily on whether lawmakers advance the long-awaited market structure bill.
Senate schedule leaves little room for progress
The Digital Asset Market Clarity Act (CLARITY Act) was notably absent from the Senate’s official schedule for August 3, raising fresh concerns about whether lawmakers can move the bill forward before Congress breaks for its summer recess.
Instead, senators are focusing on other legislative matters, including procedural votes on unrelated bills. Although Senate Majority Leader John Thune still has the option to bring the legislation to the floor later in the week, no official timetable has been announced.
With the Senate expected to begin its recess on August 10, lawmakers now have only a limited window to begin debate on one of the crypto industry’s most anticipated pieces of legislation.
Bernstein expects short-term market weakness
Bernstein analysts believe the uncertainty surrounding the bill could weigh heavily on investor sentiment.
According to the firm’s latest report, failure to advance the CLARITY Act could trigger a short-term “knee-jerk” sell-off across digital assets, including Bitcoin.
Despite this near-term caution, Bernstein remains optimistic about the months ahead.
The analysts expect the crypto market to find a bottom toward the end of the third quarter before regaining momentum during the fourth quarter, particularly as political attention shifts toward the U.S. midterm elections.
Market confidence continues to weaken
Investor expectations for the legislation have declined sharply in recent weeks.
Prediction platform Polymarket currently estimates only a 28% chance that the CLARITY Act will become law before the end of 2026. Those odds have fallen significantly over both the past week and the past month, reflecting growing doubts about congressional progress.
Meanwhile, Galaxy Digital has also lowered its expectations, cutting its estimate for the bill’s chances of passing this year to 50% because of the Senate’s increasingly crowded legislative calendar.
Regulators may step in if Congress delays
If Congress fails to approve the legislation, Bernstein believes U.S. regulators could move more aggressively using their existing authority.
The report suggests that both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) could expand regulatory guidance through Project Crypto, an initiative designed to provide greater clarity while lawmakers continue working on permanent legislation.
Possible regulatory actions could include:
- Clarifying how digital assets should be classified.
- Providing additional guidance for decentralized finance (DeFi).
- Introducing temporary exemptions for certain token issuances.
Although these measures could provide some certainty for the industry, Bernstein notes they would not replace the legal clarity that comprehensive legislation could deliver.
Banking industry remains divided
The CLARITY Act continues to face opposition from several banking organizations.
Critics argue that parts of the legislation—particularly its stablecoin provisions—could allow crypto companies to offer customer rewards without following the same regulatory standards required for traditional banks.
These concerns have become another hurdle as lawmakers attempt to build enough bipartisan support for the bill.
Senate faces a narrow deadline
Under Senate rules, lawmakers would likely need to file a cloture petition by August 5 to begin formal consideration before the recess.
Even then, several procedural steps remain before the legislation could receive final approval, including:
- A cloture vote to limit debate.
- A vote to proceed to the bill.
- Amendment discussions.
- Final Senate passage.
If these steps cannot be completed before lawmakers leave Washington, the legislation would likely be pushed into an already busy September agenda.
Outlook
The next few days could prove critical for the future of U.S. crypto regulation.
While Bernstein expects a temporary market decline if the CLARITY Act stalls, the firm remains positive about the longer-term outlook for digital assets. Investors will now be closely watching Senate developments, as the legislation could shape the regulatory landscape for crypto exchanges, token issuers, and the broader blockchain industry for years to come.
