Key Takeaways
- JPMorgan says passage of the CLARITY Act by midyear could act as a “positive catalyst” for digital assets.
- Supporters believe the bill could accelerate the tokenization of traditional financial assets.
- Coinbase CEO Brian Armstrong has expressed confidence that the bill could pass soon.
Crypto markets could receive a meaningful boost in the second half of the year if U.S. lawmakers approve sweeping digital asset legislation by midyear, according to JPMorgan, even as prices remain under pressure following a sharp selloff.
The proposed CLARITY Act has emerged as a focal point for investors seeking signs of stabilization after months of volatility — but will it truly make an impact?
JPMorgan Sees Mid-Year Passage as Market Catalyst
In a recent research note, JPMorgan Chase & Co. said passage of the CLARITY Act could act as a “positive catalyst” for digital assets later this year.
“If passed, it will reshape market structure by providing regulatory clarity, ending ‘regulation by enforcement,’ promoting tokenization, and facilitating greater institutional participation,” the bank said.
The analysts added that the CLARITY Act could reduce the legal uncertainty that has weighed on trading activity and deterred some institutional investors.
For traders, JPMorgan’s assessment suggests that regulatory certainty could spur renewed capital inflows, particularly from traditional financial institutions that have largely remained cautious.
Greater participation from banks and asset managers could, in theory, improve liquidity and potentially support higher valuations across major tokens.
However, the bill’s path forward remains uncertain.
Will the CLARITY Act Lift Crypto Prices?
Bitcoin has fallen roughly 50% from its October 2025 record high above $126,000, while the broader crypto market continues to struggle.
In February, U.S. Treasury Secretary Scott Bessent said that moving forward with stalled negotiations on the CLARITY Act could help steady markets and restore investor confidence.
“Bitcoin has a history of volatile movement,” Bessent said in an interview with CNBC.
“But part of the volatility here is self-induced: there is a group of Democrats who want to work with Republicans on getting a market structure bill — it’s called the Clarity bill — but there is a group of crypto firms who have been blocking it.”
Supporters of the CLARITY Act argue that its passage could significantly accelerate the tokenization of traditional financial assets — a trend already gaining momentum among major institutions.
“Tokenization is like a freight train. It can’t be stopped, and eventually it’s going to eat the entire financial system,” Robinhood (HOOD) CEO Vlad Tenev said in October.
By clearly defining oversight responsibilities and establishing rules for digital asset issuance and trading, the bill could reduce legal uncertainty that has slowed broader institutional adoption.
Some crypto advocates argue that Wall Street is already positioning for large-scale tokenization.
Leo Lanza, a crypto influencer on X, wrote:
“It’s absolutely mind-boggling. The CLARITY Act — the most significant bill for crypto adoption in history — is about to pass. Wall Street is preparing to tokenize $120 TRILLION worth of assets.”
The logic among bullish investors is if trillions of dollars in traditional assets migrate onto blockchain infrastructure, demand for related tokens could increase.
Greater on-chain activity may drive higher transaction volumes, fee generation, and utility for certain digital assets.
In theory, that increased usage and capital inflow could support higher valuations across parts of the crypto market.
Armstrong Predicts CLARITY Act Passage by End of April
Coinbase Chief Executive Officer Brian Armstrong previously said he believes there is a 90% chance the CLARITY Act will pass by “the end of April.”
Speaking to CNBC from Mar-a-Lago during the World Liberty Forum, Armstrong said Senate lawmakers have intensified efforts to move the legislation forward.
“The Senate has been incredible as well, so they’re meeting, as far as I can tell, daily on this to try to move this forward. And they just deserve a ton of credit,” Armstrong said.
Armstrong said Coinbase has sought to play a constructive role in negotiations between crypto firms and banks.
“All we’ve tried to do is, behind the scenes, be constructive, lay out potential solutions that can be a good win-win outcome for crypto and the banks,” he said, adding, “I feel confident moving forward with these rewards in place for stablecoins.”
A key sticking point has been whether platforms such as Coinbase should be allowed to pay users rewards for holding stablecoins.
Banks have warned that permitting yield-like incentives could draw funds away from traditional deposits and pose financial stability risks.
Armstrong said only a small list of issues remains unresolved and expressed confidence that, if lawmakers reach a compromise, the bill could reach the president’s desk within a few months.
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
