How the CLARITY Act Could Prevent a New October 10 Crypto Crash, According to Experts

The U.S. Senate has resumed discussions on the CLARITY Act, a long-awaited crypto market structure bill, with bipartisan support gaining traction. The bill seeks to provide clarity on the regulation of digital assets and is expected to pass in early 2026 according to reports. Analysts believe that its passage could be the key catalyst for an altseason in 2026, following a period of subdued market activity as market analysis indicates.

The CLARITY Act has faced delays since its introduction in 2025 due to its complexity and the need for a comprehensive regulatory framework. However, recent statements from White House officials and industry leaders suggest the legislation is on track for early 2026. David Sacks, the White House A.I. and crypto czar, affirmed the bill is closer than ever to becoming law.

Market participants remain cautious as regulatory uncertainty continues to influence investor behavior. CoinShares reported outflows of approximately $952 million in the week ending December 19, attributed to delays in passing the CLARITY Act. This has led to a decline in confidence among institutional and retail investors according to industry data.

Why Is the CLARITY Act Important for the Crypto Market?

The CLARITY Act is designed to address the structure and regulation of the broader crypto market. Unlike the GENIUS Act, which focuses on stablecoins, the CLARITY Act tackles trading, custody, and token classification. This makes it a more foundational piece of legislation for the industry as regulatory analysis shows.

The bill's potential impact extends beyond regulatory clarity. It could also accelerate the development of real-world blockchain use cases and tokenization. Anthony Scaramucci has emphasized that regulatory clarity is essential for altcoins to move beyond speculative trading and focus on utility.

How Do Analysts View the Market Outlook in 2026?

On-chain data and market trends suggest a possible shift in 2026. Bitcoin dominance metrics have improved, which is often a signal of a market bottom. Ethereum network activity has also increased, surpassing levels seen during the 2021 NFT cycle.

Coinbase Institutional's head of strategy stated that the CLARITY Act is more fundamental than previous crypto legislation and will have a long-term impact on the industry. While some traders believe the bill will not cause an immediate price surge, it is still seen as crucial for the long-term health of the crypto market.

What Are the Global Implications of U.S. Crypto Regulation?

Global regulatory efforts are pressuring the U.S. to act on crypto legislation. The European Markets in Crypto-Assets (MiCA) framework and the United Arab Emirates' regulatory initiatives have set a precedent for clarity and oversight. John D'Agostino of Coinbase noted that the U.S. is under increasing pressure to keep pace with international developments.

A failure to act could lead to a talent exodus from the U.S. to other countries, where regulatory frameworks are more established. This has already been seen in the stablecoin sector with the passage of the GENIUS Act.

The CLARITY Act's passage is expected to restore investor confidence and support a broader adoption of digital assets. With institutional investors already showing interest in Bitcoin and Ethereum ETFs, regulatory clarity could drive further capital inflows into the crypto market.

In summary, the CLARITY Act is not only a legislative milestone but also a potential turning point for the crypto market. Its passage in early 2026 is being closely watched by investors, analysts, and industry leaders as a key indicator of the market's future direction.