CLARITY Act failure could pressure crypto valuations

• Bernstein warned a CLARITY Act failure could trigger another decline across cryptocurrency valuations.
• Polymarket traders put the bill's 2026 passage odds at 31%, down seven percentage points in one week.
• Bernstein expects regulators could accelerate crypto rules if Congress fails to pass the legislation.

Bernstein warned that failure to pass the CLARITY Act could push Bitcoin (CRYPTO:BTC) and broader crypto valuations lower.

The bill's 2026 passage odds fell to 31%, with about US$3.7 million wagered on Polymarket.

“From a tactical standpoint, we expect the crypto market to bottom and start showing momentum towards late Q3 and early Q4,” said Bernstein analysts.

Bernstein said an initial market decline could be followed by faster rulemaking from the SEC and Commodity Futures Trading Commission.

The analysts said regulators could clarify token classifications, decentralised finance rules and temporary securities exemptions for some token issuers.

The SEC launched Project Crypto in July 2025, before the CFTC joined the regulatory initiative in September 2025.

The Senate faces a narrowing timetable as lawmakers negotiate ethics provisions before beginning their summer recess at the end of the week.

At the time of reporting, Bitcoin price was $63,744.81.