JPMorgan Claims Clarity Act Could Spark Bitcoin Rally

In a report addressing the stagnant crypto markets, JPMorgan analysts stated, we continue to believe that a potential approval of the market structure legislation most likely a positive catalyst for crypto markets into the second half of the year. The analysis comes as trading volumes have thinned and both retail and institutional investors hesitate to deploy new capital, largely due to the ambiguous regulatory environment in the United States.

The proposed legislation aims to provide a comprehensive framework for the digital assets market by defining clear lines of oversight. A central component involves formally delineating authority between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The act would classify tokens as either digital commodities under the CFTC or securities under the SEC.

According to the bank’s analysis, a “grandfather” clause would treat certain tokens tied to spot ETFs listed before January 1, 2026 — including XRP, Solana, and Dogecoin—as commodities. The proposal would also permit new projects to raise up to $75 million annually without full SEC registration, a move intended to encourage onshore innovation.

The primary driver for this legislative push is the persistent uncertainty that has stifled institutional investment in the crypto space. Market participants believe that without a coherent regulatory framework, significant sidelined capital from large asset managers, pension funds, and corporate treasuries is unlikely to enter the market. JPMorgan posits that clear rules would provide the compliance confidence needed for these entities to increase their allocations, potentially deepening market liquidity and reducing volatility.

The future of the Clarity Act remains uncertain. The legislative effort has stalled in the Senate after a scheduled Banking Committee markup was postponed in early 2026. The exact timeline for resuming talks or reaching a consensus is unknown, leaving the bill in limbo as lawmakers continue to negotiate key provisions. The final text of the bill is also subject to change pending these negotiations.

Progress on the bill depends on resolving disagreements among lawmakers and key industry players. The legislation faced a significant hurdle when Coinbase withdrew its support, arguing the current version could hamper innovation. According to CEO Brian Armstrong, banking trade groups have also contributed to the stalled talks. The market will continue to monitor the Senate for any signs of renewed momentum on establishing a federal framework for crypto assets.