Crypto markets have lacked conviction as traders struggle to identify a catalyst strong enough to lift prices out of their current lull. Bitcoin has remained ranged around the mid-$60,000s, while ether is trading around $2,000, and volume across major exchanges has thinned.
The digital asset market is hungry for a solid catalyst, and JPMorgan says it has identified one – market structure legislation in the US, called the Clarity Act.
“While sentiment remains negative in the crypto markets, we continue to believe that a potential approval of market structure legislation most likely in the middle of the year could serve as a positive catalyst for the crypto markets into the second half of the year,” analysts led by Nikolaos Panigirtzoglou said in a report.
While the market faces broader hesitancy among both retail and institutional participants, regulatory ambiguity has also weighed on sentiment, leaving larger investors wary of deploying new capital.
Market participants say that without tangible progress on a coherent regulatory framework, sideline capital is unlikely to return in force. This is where the Clarity Act would be a crucial catalyst for the digital asset market, according to JPMorgan.
A comprehensive framework defining oversight, token classifications and exchange obligations would remove one of the biggest overhangs on the asset class: uncertainty. With clearer rules of the road, large asset managers, pension funds and corporate funds that have been cautious so far can gain confidence and compliance cover to increase allocations.
This wave of institutional participation could, in turn, deepen liquidity, compress volatility and unlock new product development, from structured offerings to broader tokenized assets.
A bill is stuck in limbo
At its core, the proposed bill would define oversight across the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) that classify tokens as either 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 let new projects raise up to $75 million annually without full SEC registration, subject to disclosure rules. The analysts said the grace period could revive onshore issuance, venture funding and trading activity that has shifted overseas.
However, the lead U.S. effort to establish the federal crypto rules has stalled in the Senate after months of talks and missed timelines, leaving the bill in limbo as lawmakers wrangle over key provisions.
A planned markup by the Senate Banking Committee was postponed to early 2026 after Coinbase ( COIN ), the largest US crypto exchange, publicly withdrew its support for the bill, saying the current text could stifle innovation, weaken competition and limit features like stablecoin rewards.
Coinbase’s opposition revealed divisions among industry players and lawmakers, though some analysts and banking voices say the bill’s core goals, clearer SEC/CFTC oversight and defined regulatory pathways are keeping momentum alive.
Coinbase CEO Brian Armstrong said earlier this month that bank trading groups, rather than individual banks, were largely responsible for stalled negotiations on US crypto market structure legislation.
In a market still heavily driven by sentiment and flows, a decisive regulatory breakthrough can act as a powerful catalyst, the kind that not only stabilizes prices, but potentially drives them sharply higher.
Read more: From Wall Street to Web3: This Is Crypto’s Year of Integration, Says Silicon Valley Bank
