Clarity Act Could End Crypto Winter and Drive Bitcoin to New Highs

The U.S. Congress is moving forward with the CLARITY Act, a proposed piece of legislation that aims to bring clarity to the regulatory landscape for digital assets according to reports. The bill, introduced in May 2025 by a bipartisan group of House lawmakers, seeks to define which digital assets fall under the jurisdiction of the SEC and which fall under the CFTC as reported. This distinction is crucial for the crypto market, which has long faced uncertainty due to overlapping and sometimes conflicting regulatory frameworks according to analysis.

The CLARITY Act is seen as a potential turning point in the U.S. crypto market according to industry sources. Matt Hougan, chief investment officer at Bitwise Asset Management, argues that the bill could signal the end of the so-called 'crypto winter' and drive Bitcoin to new all-time highs as stated. He claims that Bitcoin's fundamentals are now stronger than its price, suggesting a shift in the traditional four-year price cycle according to his analysis.

Polymarket traders appear to be optimistic about the CLARITY Act's chances of passing, assigning it an 80% probability of being signed into law this year according to market data. If enacted, the bill would give the CFTC a central role in overseeing digital commodities, including spot markets, exchanges, brokers, and dealers as outlined. The SEC, on the other hand, would retain authority over securities-related activity and certain primary-market fundraising mechanisms according to the bill's provisions.

Why Did This Happen?

The U.S. Senate has delayed the markup of the CLARITY Act due to insufficient bipartisan support according to reports. Senate Agriculture Committee Chairman John Boozman confirmed that the markup would be postponed until the final week of January as stated. Lawmakers remain divided over key provisions, including stablecoin rewards, DeFi oversight, and the division of regulatory authority according to analysis.

The delay raises questions about whether the CLARITY Act will pass in 2026 as reported. If either the Banking or Agriculture Committee rejects the bill, it cannot move forward to the full Senate according to the legislative process. The current disagreement suggests that lawmakers do not yet have the votes needed to secure passage according to analysis.

How Did Markets React?

The crypto market has shown mixed reactions to the uncertainty surrounding the CLARITY Act according to market data. Some industry leaders remain bullish, believing the bill could attract institutional investment and reduce market manipulation as reported. Supporters argue that clearer regulations will make the crypto market more stable and predictable according to analysis.

However, not all lawmakers are in favor of the bill according to reports. Some Democrats have raised concerns about investor protections, while some Republicans have criticized possible restrictions on stablecoin yields and DeFi as stated. Coinbase, one of the largest U.S. crypto exchanges, has warned that certain provisions targeting stablecoin rewards could cost the bill its support according to industry sources.

What Are Analysts Watching Next?

The next major step for the CLARITY Act is the Senate Banking Committee vote on January 15 according to reports. If the bill is approved, it will move to a full Senate vote, then return to the House for final approval, and eventually reach President Donald Trump's desk as outlined. The vote represents a potential turning point for U.S. cryptocurrency policy according to analysis.

Analysts are also watching how lawmakers resolve the key disputes according to reports. The final version of the bill will depend on whether lawmakers can find common ground on stablecoin rewards, DeFi oversight, and the division of regulatory authority as reported.

Proponents of the CLARITY Act argue that it could bring the U.S. crypto market closer to traditional financial standards according to analysis. If the bill is signed into law, it may lead to increased institutional participation and greater investor confidence in digital assets according to industry projections. The outcome of the January 15 vote will likely have a significant impact on the future of crypto regulation in the U.S. as reported.