The Digital Asset Market Clarity Act, better known as the CLARITY Act, has been sitting in the U.S. Senate for more than a year since it cleared the House on July 17, 2025, by a 294-134 vote. On May 14, 2026, the Senate Banking Committee voted 15-9 to move the bill onto the legislative calendar. Even so, it has yet to receive a full Senate vote, and it has not been signed by the president.
The bill is designed to set a classification framework for crypto assets, drawing a line between tokens treated as securities and those treated as commodities. That distinction would determine how authority is divided between the U.S. Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC. The bill also covers self-custody of private keys, stablecoin yield arrangements and registration rules for offshore exchanges. At this stage, the biggest obstacle is an ethics review provision focused on possible conflicts of interest involving senior government officials’ crypto assets.
On July 27, Senate Majority Leader John Thune said the chamber would prioritize a Russia sanctions bill and nominations in the near term, which could push the CLARITY Act’s voting window back to September. Industry participants and congressional negotiators had previously treated Aug. 7 as the last realistic window for the bill to pass in 2026. If that deadline is missed, many analysts think the chances of enactment this year fall sharply.
Polymarket data now shows just a 35% chance that the bill will be signed into law in 2026, down from 82% in February.
Odaily Planet Daily framed the possible fallout across three fronts: the crypto market, U.S. crypto-linked equities and Washington politics.
Crypto market: analysts largely see limited damage, with some pessimism already priced in
Recent market behavior suggests investors have already started to absorb weaker odds for the CLARITY Act. The clearest signal is the drop in Polymarket’s implied probability from 82% to 35%. That market traded above 70% several times between February and May, then weakened through June. Total volume has reached $2.845 million.
Bitcoin itself has also been under pressure. In late July, BTC briefly traded around the $65,000 to $66,000 range. The market has broadly linked that move to macro liquidity conditions rather than to the bill alone.
On the institutional side, many analysts have pushed back against the idea that failure of the bill would amount to an industry crisis. Compass Point Research & Trading analyst Ed Engel kept a sell rating on Coinbase, but he also said there are enough industry events in the second half of the year to keep attention on the sector. In his view, the blockchain industry still has a chance over the next two to three years to prove real-world utility.
The details of the legislation also matter. Different sectors would feel the impact in different ways. One example is the stablecoin yield provision. A March draft of the CLARITY Act proposed banning any stablecoin holding arrangement that is “substantially equivalent to interest.” That proposal sent Circle shares down 20% in one day, while Coinbase fell nearly 10% on the same session. In that sense, the market impact of failure depends heavily on the final wording of the bill, not simply on whether the bill passes.
U.S. equities: Coinbase, Circle and crypto treasury companies face different setups
Coinbase: near-term pressure, but long-term thesis is not widely seen as dependent on CLARITY
Coinbase shares have already come under pressure as the bill’s chances weakened. On July 28, COIN closed at $165, down 3.8% over the prior five trading days. That decline was attributed to selling tied to a dimmer legislative outlook.
Earlier, during the week of July 24, COIN had already slipped from around $169. Raymond James set a $158 target price, roughly 6.5% below the stock’s level at the time. Oppenheimer had earlier cut its target to $209. Baird lowered its target from $160 to $142 and kept a neutral rating.
Read together, those analyst targets suggest that if the CLARITY Act does not pass, Coinbase is likely to be assessed somewhere in the $140 to $160 range.
That said, most analysts have not tied Coinbase’s long-term case directly to the bill’s fate. A view cited by TipRanks argues that even if the bill misses passage before August, Wall Street’s broader institutional allocation trend toward crypto assets should still support Coinbase over time. Coinbase is scheduled to report second-quarter earnings on July 30, with the market expecting earnings per share of $0.19, a sharp improvement from a loss of $1.49 per share in the first quarter. In the article’s framing, longer-term growth could offset the damage from a failed bill.
Circle: some analysts say failure may not be negative
Circle’s position looks more complicated. Some analysts argue that failure of the CLARITY Act would not necessarily hurt the company. Mizuho analysts said that if the bill passes and creates a clearer regulatory framework, that clarity could invite more stablecoin competitors into the market and speed up commoditization in the segment, putting pressure on Circle’s revenue over the long run.
The stablecoin sector this year has already seen the emergence of Open USD, a project backed by more than 140 institutions including Visa, Mastercard, Stripe and BlackRock. The article describes it as a direct competitive threat to Circle’s USDC. Mizuho had already cut its rating on Circle because of that project.
There is another angle. If the CLARITY Act’s restrictions on stablecoin yield are ultimately adopted, Coinbase could lose some of the high-margin income it receives through its USDC distribution arrangement. That would shift bargaining power toward Circle when the two sides renegotiate their commercial agreement in August 2026. Morgan Stanley analyst Thielen said a tougher federal regulatory framework would generally favor licensed issuers with compliance capabilities, scale and credit support, putting Circle in a relatively stronger position. Bitwise Chief Investment Officer Matt Hougan said the earlier selloff in Circle triggered by the draft bill was “overinterpreted,” and that the bill does not change Circle’s long-term investment case.
Based on the analysis cited in the piece, failure of CLARITY could even be positive for Circle’s long-term share price. If sentiment weakens further in the short term, one repeatedly cited support level is around $61.70. In a more extreme scenario, the market has also mentioned a possible retreat to this year’s February low of $49.
Crypto treasury companies: more tied to Bitcoin than to the bill itself
Crypto treasury firms led by Strategy, formerly MicroStrategy, ticker MSTR, show much stronger linkage to Bitcoin prices than to the CLARITY Act directly. The article treats them as leveraged Bitcoin exposures.
As of July 1, after Bitcoin fell below $59,000, MSTR dropped into the $85 to $86 range. That marked its 11th straight monthly decline and left the stock down about 84% from its roughly $540 peak in November 2024. Citi analysts linked their base case for Bitcoin at $100,000 to expectations that the CLARITY Act would pass. In that framework, if the bill were enacted and helped lift Bitcoin to $100,000, the value of Strategy’s Bitcoin holdings would rise to about $84 billion.
Strategy has also disclosed that its model sets the lower bound for annualized Bitcoin returns at negative 11.34%. If actual returns fall below that level, the company may need to consider restructuring its debt. The article adds that two listed companies sold a combined 511 BTC within 24 hours to repay about $31.7 million in debt. Those financial strains are relatively independent of the CLARITY Act’s path, but they can become more visible if the bill drags on and market sentiment stays weak. Strategy is due to report second-quarter results during the week of July 30-31, and the market expects volatility in the stock to increase around that period.
Washington politics: if the current window closes, the next round gets harder
In the Senate, the bill’s prospects come down to whether supporters can win over seven to nine Democratic senators to clear the 60-vote threshold. On the Republican side, Senators Josh Hawley and Rand Paul are expected to oppose the bill on substantive grounds. That means even if all 53 Republicans are present, they still cannot move it through on their own. Among Democrats, Arizona Senator Ruben Gallego is seen as a relatively reliable supporter.
The article argues that Democratic resistance is not only about the structure of crypto regulation. It is also tied to the more than $1 billion in crypto-related investments disclosed by Donald Trump and his family. Several Democratic senators view the ethics provisions as a tool to constrain possible presidential conflicts of interest. Senator Angela Alsobrooks had previously described a White House compromise proposal as “not a serious proposal.” In that sense, the CLARITY Act has become entangled with a broader anti-Trump political fight rather than remaining a narrow technical debate over market structure.
If the bill fails to pass in 2026, many analysts do not expect a regulatory vacuum. Instead, the crypto industry would continue to rely in the short term on two existing tracks. One is the GENIUS Act, which took effect in July 2025 and specifically governs payment stablecoins and their issuers. The other is the separate regulatory agenda being advanced by the SEC and CFTC. Within that process, the SEC’s Regulation Crypto proposal is expected to formally enter rulemaking in the second half of 2026.
Timing is critical. The November 2026 midterm elections are described as the key variable for what happens next. If lawmakers miss the pre-recess August window, the odds of reviving the bill in the fall shrink because of appropriations battles and the approaching election cycle. Real movement may then have to wait until 2027. But 2027 would come after a post-midterm political reshuffle, which could reduce the chances of preserving the bipartisan consensus the bill had relied on earlier.
The piece also notes one alternative route floated by some industry lobbyists: folding the core provisions of the CLARITY Act into a must-pass omnibus bill at year-end. So far, though, no senator has publicly confirmed that this strategy is being seriously considered.