Expert analysis suggests the passage of the long-delayed crypto market structure legislation, known as the CLARITY Act, could trigger an unprecedented inflow of institutional capital into digital assets, potentially exceeding $5 trillion. However, confidence in the bill's passage this year has waned, with prediction market Polymarket now assigning it only a 42% chance of becoming law in 2026.
The bullish case, articulated by expert 360Trader, hinges on regulatory certainty unlocking "trillions of dollars" currently sidelined. He cites White House Digital Asset adviser Patrick Witt, who confirmed institutional capital is waiting for legal clarity before entering the market. Large asset managers like BlackRock are often highlighted as being constrained by the current regulatory patchwork. The expert believes the Act could be the catalyst for the next major bull run, potentially pushing total crypto market capitalization beyond $4 trillion.
A key component of the proposed framework involves stablecoins. It would provide clearer authorization for banks to issue them, potentially enabling major institutions like JPMorgan to launch integrated products. The stablecoin market has already grown significantly, with a reported $300 billion in supply and $33 trillion in transaction volume in 2025. Furthermore, the yield disparity—with some crypto products offering 3-5% versus traditional savings accounts at ~0.07%—could prompt a massive reallocation of capital, estimated at up to $6 trillion, from bank deposits into crypto instruments.
Despite the potential, negotiations have hit roadblocks. Three key White House meetings between crypto firms and banking representatives have failed to produce a final agreement. The banking sector has pushed back against stablecoin yield structures, fearing the impact on their deposit bases. A major concession is that paying yield on idle stablecoin balances is now "effectively off the table," shifting the debate to rewards tied to user activity.
Market structure expert MartyParty outlined potential profound impacts if the bill passes. It would likely cement the Commodity Futures Trading Commission (CFTC) as the primary regulator for digital asset commodities like Bitcoin (BTC). This could accelerate the growth of regulated US trading venues, potentially leading to CFTC-registered perpetual futures platforms with greater consumer protections. Clearer commodity classification is also seen as a key to unlocking greater institutional participation from funds restricted from investing in securities.
