Clarity Act Stalls: Bernstein Warns of Another Crypto Market Selloff

Wall Street broker Bernstein issued a report on Monday warning that if the Clarity Act stalls in its passage this year, it could trigger another selloff in crypto markets.

The Clarity Act is considered one of the most important pieces of legislation for the industry, aiming to establish clear rules and reduce regulatory uncertainty. According to analysts led by Gautam Chhugani, failure to pass the bill would likely prompt an immediate negative reaction across digital assets, although they argue this setback would be temporary.

The analysts expect regulators to move more quickly on token classifications, decentralized finance guidance, self-custody rules, and innovation exemptions for token issuance. They also see the current downturn ending in late third or early fourth quarter, helped by the prospect of further White House policy support.