Crypto has been sitting in a holding pattern. The catalyst JPMorgan thinks could break it loose is stuck in the Senate.
The Digital Asset Market CLARITY Act passed the House in June 2025. It would split oversight of crypto between two regulators: the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Under the bill, tokens would be classified as either commodities or securities depending on their nature — a change that would end years of legal gray area where the SEC pursued enforcement actions without clear rules.
JPMorgan analysts led by Nikolaos Panigirtzoglou said the bill would "reshape market structure by providing regulatory clarity, ending 'regulation by enforcement,' promoting tokenization, and facilitating greater institutional participation." They called it the most likely catalyst for a second-half rally in crypto markets.
The bill hit a wall in the Senate over a seemingly narrow issue: stablecoin yields. Banks are pushing to restrict whether dollar-pegged stablecoins can pay interest to holders, fearing it would pull deposits away from savings accounts. Crypto firms argue the restriction would push innovation overseas.
Coinbase withdrew its support in January after the Senate revised the bill's text, calling the amendments a threat to competition and innovation. The Senate Banking Committee postponed its markup the same day — and hasn't rescheduled since. Baker McKenzie noted that the momentum evaporated almost overnight once Coinbase went public with its opposition.
Senate markup is now expected sometime in mid-to-late March, with a soft deadline of July before election-cycle gridlock sets in. Ripple CEO Brad Garlinghouse put odds of passage at 80–90% by late April. Polymarket traders are less optimistic — odds have fallen to 63%, down from 82% just two weeks ago.
If it passes, JPMorgan expects institutional investors — pension funds, asset managers, insurers — to move from cautious allocations into larger positions. If it stalls, the uncertainty that has kept crypto range-bound could drag into 2027.
The bill already missed its March 1 deadline. The clock is ticking.