Jefferies warns: Legislative uncertainty surrounding the CLARITY bill could trigger volatility in the crypto market.

According to a recent report by investment bank Jefferies, the Clarity Act, despite passing the Senate Banking Committee by a 15-9 bipartisan vote, faces significant obstacles in its subsequent legislative process, with political uncertainty potentially exacerbating volatility in the crypto market in the coming weeks. The bill aims to clarify the boundaries of regulation of digital assets by the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) and is considered a core legislative framework for the US crypto market structure. Jefferies points out that successful passage would significantly increase institutional participation, while delays would prolong regulatory uncertainty. Current Polymarket data shows that the probability of the bill passing before the end of 2026 has dropped to 48%, a significant decrease from 70% in mid-May, mainly due to ethical controversies, anti-money laundering scrutiny, and a tense Senate agenda. Analysts say that Congress has only about 20 legislative days left before its August recess to complete the reconciliation of versions in both the House and Senate, procedural votes, and submission for presidential signature. Failure to advance before the recess could delay the bill into next year, or even further due to the election cycle. Jefferies believes that if the bill is passed, it will drive the expansion of businesses such as tokenized assets, custody, staking, lending, and crypto ETFs, and benefit the development of markets like Bitcoin (BTC) and Ethereum (ETH). However, if it is delayed, it may inhibit institutional investment in on-chain infrastructure and crypto-related IPOs. Furthermore, the market expects policy uncertainty to continue to impact the stock performance of crypto-related listed companies such as Circle, Coinbase, and Bullish. Jefferies added that even as regulations become clearer, increased competition in stablecoins may remain a long-term source of pressure for companies like Circle. (CoinDesk)