Bernstein Warns of Negative Market Reaction as CLARITY Act Faces Uncertainty
The prospects for approval of the CLARITY Act, proposed to establish rules for the digital asset market in the United States, have become more uncertain. The proximity of the Senate's summer recess increases pressure on the legislative calendar.
The assessment comes from asset manager Bernstein, which considers a negative market reaction possible if senators are unable to move forward with the legislation before the parliamentary break. A possible delay could once again affect Bitcoin and other cryptocurrencies, mainly through investors' expectations regarding the creation of clearer rules for the sector.
From a tactical point of view, Bernstein analysts expect the cryptocurrency market to hit bottom and begin to show momentum at the end of the third quarter and the beginning of the fourth quarter, before the midterm elections. This could be a positive consequence, as the lack of progress in Congress could encourage faster regulatory measures by the SEC and the CFTC.
The two agencies could expand initiatives envisaged under the so-called Project Crypto. The proposal seeks to use existing regulatory powers while Congress works on more comprehensive legislation for the cryptocurrency market. Possible measures include new clarifications on token classification, specific rules for decentralized finance (DeFi), and mechanisms that facilitate certain token issuances.
Bernstein also highlighted the possibility of accelerating exemptions intended for innovation projects. These rules could allow certain tokens not to be treated as securities for a defined period.