Crypto Market Has 'Definitely Not Priced In' Clarity Act Surprise, Says Bernstein

In brief

• Bernstein says markets have not priced in a positive surprise on the Clarity Act.
• Republicans revised ethics enforcement and protections for community-bank deposits.
• Analysts disagree on the prospects for passage ahead of Tuesday’s procedural vote.

Crypto markets may be underestimating progress on the Clarity Act after Republicans offered concessions on ethics and banking concerns, Bernstein analysts said ahead of a Senate procedural vote tomorrow.

“We reckon any positive surprise is definitely not priced in,” analysts led by Gautam Chhugani wrote in a client note on Monday.

The Clarity Act would establish federal rules for digital assets and clarify the responsibilities of the Securities and Exchange Commission and Commodity Futures Trading Commission. Advancing it requires Democratic support, which disputes over officials’ crypto holdings and stablecoin rewards have complicated.

Republican sponsors say their latest draft released on Sunday incorporates 126 changes requested by Democrats, including a role for state attorneys general in enforcing ethics restrictions. President Donald Trump has agreed to the revised restrictions.

Sen. Cynthia Lummis (R., Wyo.), chair of the Senate Banking Subcommittee on Digital Assets, urged Democrats to back the revised bill, saying Republicans had addressed their demands.