Crypto markets have lacked conviction as traders struggle to identify a catalyst strong enough to break prices out of their current lull. Bitcoin has remained range-bound around $60,000, while ether is trading around $2,000 and volumes on major exchanges have declined.
The digital assets market is hungry for a strong catalyst, and JPMorgan says it has identified one: US market structure legislation called the Clarity Act.
“While sentiment remains negative in crypto markets, we continue to believe that a possible approval of market structure legislation, most likely by mid-year, could serve as a positive catalyst for crypto markets in the second half of the year,” analysts led by Nikolaos Panigirtzoglou said in a report.
As the market faces greater hesitancy from retail and institutional players, regulatory ambiguity has also weighed on sentiment, leaving large investors cautious about deploying new capital.
Market participants say that without tangible progress within a coherent regulatory framework, marginalized capital is unlikely to make a comeback. This is where the Clarity Act would be a decisive catalyst for the digital asset market, according to JPMorgan.
A comprehensive framework defining oversight, token classification, and exchange obligations would eliminate one of the biggest problems plaguing the asset class: uncertainty. With clearer rules of conduct, large asset managers, pension funds and corporate treasuries that have remained cautious so far could gain the confidence and compliance cover needed to increase their allocations.
This wave of institutional participation could in turn increase liquidity, reduce volatility and unlock the development of new products, from structured offerings to broader tokenized assets.
A bill left in limbo
At its core, the proposed bill would define oversight within the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), classifying tokens as digital commodities or securities.
The bank’s analysts said placing major tokens under CFTC jurisdiction would reduce compliance burdens and legal uncertainty. A “grandfather” clause would allow certain tokens linked to spot exchange-traded funds listed before January 1, 2026, including XRP, solana, litecoin, hedera, dogecoin and chainlink, to be treated as commodities.
The proposal would also allow new projects to raise up to $75 million annually without full SEC registration, subject to disclosure rules. Analysts said the grace period could revive domestic issuance, venture financing and deal activity that has moved overseas.
However, major U.S. efforts to establish federal crypto rules have stalled in the Senate after months of discussions and missed deadlines, leaving the bill in limbo as lawmakers argue over key provisions.
A planned markup by the Senate Banking Committee was delayed until early 2026 after Coinbase (COIN), the largest U.S. cryptocurrency exchange, publicly withdrew its support for the bill, saying the current text could hinder innovation, weaken competition and restrict features such as stablecoin rewards.
Coinbase’s opposition has exposed divisions between industry players and lawmakers, even as some analysts and banking industry voices say the bill’s core goals, clearer SEC/CFTC oversight and defined regulatory pathways, maintain momentum.
Coinbase CEO Brian Armstrong said earlier this month that banking trade groups, rather than individual banks, were largely to blame for the impasse in negotiations over U.S. crypto market structure legislation.
In a market still heavily influenced by sentiment and flows, a decisive regulatory breakthrough could act as a powerful catalyst, the type that would not only stabilize prices, but potentially propel them sharply higher.
Learn more: From Wall Street to Web3: It’s the Year of Crypto Mainstreaming, Says Silicon Valley Bank
