JPMorgan Blames CLARITY Act Delay For Crypto Market Bearishness

Wall Street giant JPMorgan has warned that uncertainty surrounding the passage of the CLARITY Act will affect digital asset prices. Odds for CLARITY Act passage in 2026 have fallen to new lows as lawmakers bicker over the bill’s finer details, despite Trump agreeing to a key ethics provision.

CLARITY Act uncertainty holds crypto from massive gains, says JPMorgan

In a note to clients, JPMorgan warned that the falling odds for CLARITY Act passage are a major stumbling block for a crypto breakout. The analysts, led by Nikolaos Panigirtzoglou, forecasted that if the bill becomes law, it will trigger a strong rally for Bitcoin (BTC), Ethereum (ETH), and other altcoins. 

Apart from price action, JPMorgan noted that crypto markets are also at risk from bad actors taking advantage of the meteoric rise of tokenization and mainstream adoption of blockchain applications. If passed into law, the CLARITY Act will establish clear rules for digital assets in the US, with JPMorgan noting that it will keep capital and talent in the US.

“The longer the approval of the CLARITY Act is postponed, the greater the threat to crypto markets from the growth of tokenization and blockchain-based applications,” read the JPMorgan note.

Previously, JPMorgan CEO Jamie Dimon criticized the CLARITY Act for allowing Web 3-native companies to wade into the turf of Wall Street banks without proper guardrails. The note still reechoes some parts of Dimon’s criticism, pointing to provisions allowing tokenized securities and derivatives trading outside SEC or CFTC oversight.

Despite strong support, the bill is in the doldrums in the Senate, with lawmakers still haggling over key provisions. To help push the bill to the finish line, US SEC Chair Paul Atkins has offered Congress technical assistance, highlighting the benefits for the US if it passes into law.

Odds for passage in 2026 tank to new lows

Prediction markets peg the odds of the CLARITY Act passing before 2027 at 39% from last month’s even figures of 50%. Meanwhile, Galaxy cut its odds from 50% to 30% in under a month, with the chances standing at 60% in June.

Source: Polymarket

Several factors account for the falling odds, with pundits pointing to Senators turning their gaze to more pressing issues. Furthermore, passage is tipped to be interrupted by Congress’ August recess and midterm Congressional elections, weighing on the odds of passage in 2026.

Meanwhile, investment bank Jefferies warned that the bill faces significant hurdles despite passing the Senate Banking Committee stage. Particularly, a Republican version of the bill with updated ethics provisions drew criticism from a handful of Democrats to the dismay of CLARITY Act backers.

Treasury Secretary Scott Bessent described the delays as “disappointing” while urging the Senate to schedule an immediate vote for the CLARITY Act. To pass the US Senate and clear standard legislative hurdles, the bill requires 60 votes. If all Republican members vote in favor of the bill, it still requires 9 Democratic votes to proceed, with lobbyist groups working frantically to secure the necessary support.