CLARITY Act's Failure Sparks Fears of Crypto Market Decline

Congress's failure to pass the CLARITY Act has sent shockwaves through the cryptocurrency market, according to wealth manager Bernstein. The legislation aims to provide clarity on digital assets and was expected to be passed before the US Senate begins its summer recess at the end of this week.

Bernstein analysts predict that the lack of regulation could lead to a negative reaction in the market, causing crypto valuations to fall. They also warn that this could accelerate policy support from US regulators, who may feel compelled to intervene in the absence of clear legislation.

The analysts expect the crypto market to hit a bottom and show momentum towards late Q3 and early Q4 prior to the mid-terms. From a tactical standpoint, they believe that investors should be prepared for another leg down in Bitcoin and the broader crypto market.