JPMorgan sees crypto boost if market-structure bill passes
The Clarity Act is part of a broader push in Congress to create a comprehensive regulatory framework for digital assets
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[NEW YORK] Crypto markets may get a meaningful lift in the second half of the year if US lawmakers approve sweeping market-structure legislation by midyear, even as sentiment remains sour, JPMorgan Chase said.
“If passed, it will reshape market structure by providing regulatory clarity, ending ‘regulation by enforcement’, promoting tokenisation, and facilitating greater institutional participation,” the bank said in a research note.
The Clarity Act, which has passed the House, is part of a broader push in Congress to create a comprehensive regulatory framework for digital assets. The bill has moved more slowly in the Senate amid disagreements, as lawmakers seek to address what they view as gaps in the Genius Act, signed by US President Donald Trump in July. The measure was the first to set a federal framework for issuing stablecoins.
A key sticking point is whether crypto trading platforms such as Coinbase Global should be allowed to pay users rewards for holding stablecoins, a type of token designed to track the value of the US dollar. Banks argue that letting firms effectively pay yield on clients’ stablecoin holdings could draw money away from lower-yielding deposits and pose risks to financial stability.
Coinbase chief executive officer Brian Armstrong in January, withdrew his support for the draft legislation. Coinbase, other crypto firms and trade groups and the banking industry have since held several meetings at the White House to discuss a compromise. Last week, Armstrong said there is a “path forward”.
Bitcoin surged on expectations of a more crypto-friendly second Trump administration, reaching a record above US$126,000 last October. A sharp sell-off followed, leaving digital assets under pressure and investors more cautious. Any sustained rebound would offer relief after cryptocurrencies were pummelled late last year.
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“Crypto winters don’t end in excitement; they end in apathy,” said Matt Hougan, chief investment officer at Bitwise Asset Management. “The one-day big up moves are thrilling, but no one expects Bitcoin to run straight back to US$100,000. Bitcoin is in the process of bottoming. The process will take a while and will be messy. There could be lower lows.” BLOOMBERG
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