Senate Markup on CLARITY Act: Tactical Setup for January 15

The immediate event is set for January 15, 2026 at 10:00 AM, when the Senate Banking Committee will hold a markup on H.R.3633, the Digital Asset Market Clarity Act. This is the next critical step after the bill's overwhelming passage in the House in July 2025. Chairman Tim Scott has framed the markup as a pivotal moment to "deliver real results" and establish the U.S. as the global crypto capital.

The market context is one of quiet anticipation. Crypto markets have been trading in a narrow range, a sign of cooling speculative intensity. Traders are likely positioning for the markup outcome, as the event represents a near-term catalyst that could resolve a key piece of regulatory uncertainty. The thesis is that this markup could move the needle, but its direct impact hinges on the final bill's content and the likelihood of eventual passage.

The Mechanics: Sector-Specific Impacts

The tactical setup hinges on how the markup resolves three key sector-specific tensions. The first is the fate of decentralized finance. Democrats are reportedly pushing to classify DeFi protocols as centralized intermediaries, a move that would dramatically increase their regulatory burden. For now, the House bill leans toward a lighter touch, but the Senate markup is where that fight will be settled. A shift toward centralization would be a direct negative for DeFi tokens and infrastructure providers, while a more permissive outcome could spark a sector-specific rally.

Second, the bill is being sold as essential to keep U.S. innovation and jobs in digital assets. The argument is that without clear rules, global competition will win. As Chairman French Hill noted, other regions are moving fast. The EU's MiCA framework is already in place, and Latin America is seeing massive adoption. The Senate is framing this markup as a chance to lock in the U.S. position. The immediate market implication is that any sign of the U.S. falling behind could trigger a flight to other jurisdictions, pressuring U.S.-based firms.

Finally, banks are pushing to limit stablecoin rewards ahead of the markup, indicating intense regulatory pressure on this sector. This is a direct clash between traditional finance and crypto-native models. The bill's provisions on bank participation in staking and interest-bearing stablecoins are a major point of contention. A favorable ruling here would be a clear win for major banks and could boost related stocks, while a restrictive outcome would be a setback for the broader stablecoin ecosystem.

Immediate Risk/Reward Setup

The tactical setup for January 15 is a classic binary event. The market's direction hinges almost entirely on the markup's outcome, which will either remove a major overhang or inject fresh uncertainty. The risk/reward is defined by three clear scenarios.

A clean markup and swift Senate passage would be a direct positive catalyst. It would validate the bipartisan effort and signal that the U.S. is moving decisively to establish clear rules. This would likely reduce the regulatory overhang that has constrained the sector, potentially sparking a relief rally. The bill's stated goal of making the U.S. the "crypto capital of the world" would gain tangible momentum, aligning with the argument that clear rules are essential to keep innovation and jobs at home after months of serious, bipartisan work.

The primary risk is that the markup introduces significant amendments or delays. The committee's rules require member amendments to be filed by January 13, just days before the markup, which suggests intense last-minute negotiations. If the markup adds new, burdensome requirements-like the Democratic push to classify DeFi as centralized intermediaries-it could create renewed uncertainty and volatility. The market has been trading in a narrow range, a sign of low conviction; a messy markup could break that pattern on the downside. The risk is not just a delay, but a dilution of the bill's original intent, which could undermine its effectiveness.

The overarching threat is that the bill fails to pass before the end of the year. This would directly undermine the stated goal of establishing U.S. leadership. As Chairman French Hill has noted, other regions are moving fast, with the EU's MiCA framework already in place and Latin America seeing massive adoption across Latin America, we saw firsthand digital asset use cases in the real economy. A failure to pass before year-end would signal legislative paralysis and likely trigger a flight to other jurisdictions, pressuring U.S.-based firms and tokens. The markup is the immediate test; the year-end deadline is the ultimate checkpoint.

The bottom line is that this event is a near-term catalyst with a clear binary outcome. A clean markup is a positive setup; a contentious one or a failure is a negative. The market's quiet range will likely break decisively on January 15.

What to Watch: Catalysts and Guardrails

The tactical setup is now defined by three specific watchpoints. Traders need to monitor these signals in the hours and days following the markup to gauge the bill's fate and the market's reaction.

First, monitor the markup outcome itself. The committee's rules require member amendments to be filed by January 13, just two days before the markup. This tight deadline suggests intense last-minute negotiations. The key signal will be whether the markup proceeds with a clean vote on the managers' package or if it becomes bogged down by amendments. A clean markup, as Chairman Scott has suggested, would be a strong positive signal of bipartisan momentum. Any significant amendments, especially those that dilute the bill's core principles like the DeFi classification or bank participation rules, would introduce fresh uncertainty and likely pressure the market.

Second, watch for the Senate floor schedule and any bipartisan support signals post-markup. The markup is just the first step; the bill must still pass the full Senate. The committee's official notice confirms the markup is set for January 15 at 10 AM ET. Traders should look for announcements on the floor schedule in the days following the markup. More importantly, watch for statements from both Republican and Democratic senators. Chairman Scott has framed the bill as a bipartisan effort, but the final outcome will depend on securing enough votes. Any visible cracks in the bipartisan coalition or signs of a delay would be a red flag for the market.

Finally, track retail sentiment and liquidation data for signs of market positioning ahead of the vote. The market has been trading in a narrow range, a sign of low conviction ahead of the catalyst. Recent data shows total crypto market liquidation at $66.89 million in the last 24 hours, with leverage unwinding across the board. This hints at cooling speculative intensity rather than forced de-risking. Traders should monitor platforms like Stocktwits for shifts in retail sentiment, particularly around major tokens like Bitcoin and Ethereum. A sudden spike in bearishness or a surge in bullish chatter could signal positioning ahead of the vote. More broadly, watch for any sudden spikes in liquidation data, which could indicate leveraged positions being unwound if the outcome is negative.

The bottom line is that the markup is the immediate catalyst, but the market's reaction will be shaped by the outcome's clarity and the perceived path to final passage. Traders should focus on the three watchpoints: the markup's smoothness, the floor schedule, and retail positioning.