Cryptocurrency markets lack confidence as traders struggle to find catalysts strong enough to push prices out of the current lull. Bitcoin has remained range-bound around $60,000, while Ethereum is trading around $2,000, with lower trading volumes on major exchanges.
The digital asset market is hungry for a solid catalyst, and JPMorgan Chase says it has found one — U.S. market structure legislation known as the Clarity Act.
“While sentiment in the cryptocurrency market remains negative, we continue to believe that market structure legislation is most likely to be approved by mid-year, which could serve as a positive catalyst for the cryptocurrency market in the second half of the year,” analysts led by Nikolaos Panigirtzoglou said in a report.
While the market faces broader hesitancy among both retail and institutional players, regulatory ambiguity has also weighed on sentiment, making larger investors wary of deploying new capital.
Market participants say that without tangible progress on a coherent regulatory framework, capital from the sidelines is unlikely to return effectively. JP Morgan stated that the Clarification Act will be a decisive catalyst for the digital asset market in this regard.
A comprehensive framework that defines regulation, token classification, and trading obligations would remove one of the asset class’s biggest obstacles: uncertainty. With clearer rules, large asset managers, pension funds and corporate treasuries, which have so far remained cautious, could gain the confidence and compliance assurance to increase allocations.
In turn, this wave of institutional participation is likely to deepen liquidity, compress volatility and facilitate new product development, from structured products to a wider range of tokenized assets.
Bill in trouble
At the heart of the proposed bill is the definition of regulation by the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) to classify tokens as digital commodities or securities.
Analysts at the bank said placing major coins under the jurisdiction of the Commodity Futures Trading Commission would reduce compliance burdens and legal uncertainty. A “grandfather” provision would allow certain tokens associated with spot exchange-traded funds listed before January 1, 2026 (including XRP, solana, litecoin, hedera, dogecoin and chainlink) to be treated as commodities.
The proposal would also allow new projects to raise up to $75 million per year without fully registering with the U.S. Securities and Exchange Commission (SEC), subject to disclosure rules. Analysts said the grace period could reinvigorate onshore issuance, venture financing and trading activity that had been moved offshore.
However, after months of negotiations and missed timelines, a major U.S. effort to craft federal cryptocurrency rules has stalled in the Senate, leaving the bill bogged down as lawmakers spar over key provisions.
The Senate Banking Committee’s planned price increase was delayed in early 2026 after Coinbase (COIN), the largest U.S. cryptocurrency exchange, publicly withdrew its support for the bill, saying the current text could hinder innovation, weaken competition, and limit features such as stablecoin rewards.
Coinbase’s opposition exposed divisions among industry players and lawmakers, although some analysts and bankers said the bill’s core goals, clearer SEC/CFTC oversight and a clear regulatory path would maintain momentum.
Coinbase CEO Brian Armstrong said earlier this month that banking trade groups, rather than individual banks, were primarily to blame for the deadlock in U.S. negotiations over legislation to structure the cryptocurrency market.
With markets still heavily driven by sentiment and capital flows, a decisive regulatory breakthrough could act as a powerful catalyst that not only stabilizes prices, but potentially drives them sharply higher.
Read more: From Wall Street to Web3: This is the year of consolidation for cryptocurrencies, says Silicon Valley Bank