JPMorgan: Crypto Market Structure Bill Approved Mid-Year, Becomes a Catalyst for the Second Half

Despite the ongoing weak sentiment in the cryptocurrency market, JPMorgan’s analyst team led by Managing Director Nikolaos Panigirtzoglou stated in their latest report that U.S. market structure legislation (the “CLARITY Act”) is most likely to be approved by mid-2026 and will serve as a positive catalyst for the second half of the crypto market. JPMorgan also reaffirmed its long-term target price for Bitcoin at $266,000.

Legislative Background: Current Status and Two Major Obstacles of the CLARITY Act

The CLARITY Act aims to establish a comprehensive regulatory framework for digital assets in the U.S. The House has advanced the bill, while the Senate is still discussing it. Currently, there are two core obstacles hindering the legislative process:

First is the issue of stablecoin yields. Crypto companies want to offer yield rewards to stablecoin holders, but banks worry this could lead to deposit outflows from traditional banking systems, posing financial stability risks. Second is the conflict of interest controversy. Democrats are actively pushing for restrictions that prohibit high-ranking government officials, including the President, and their families from participating in certain crypto-related financial activities.

The White House has held multiple closed-door negotiations with representatives from the crypto industry and banking sector. Both sides are still negotiating core disagreements, and compromises remain possible.

JPMorgan Catalyst: Key Market Impacts After Bill Passage

JPMorgan analysts have detailed the positive catalysts that will emerge once the CLARITY Act is passed. The four most directly impactful market catalysts include:

Four Most Market-Influential Catalysts

Dual Regulatory Framework: Tokens are classified as “digital commodities” under CFTC jurisdiction and “digital securities” under SEC jurisdiction; the “grandfather clause” allows ETF-related assets like XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink to fall under the more lenient CFTC system, significantly reducing compliance burdens

Grace Period for New Projects: Allows new projects to raise up to $75 million annually during their transition to decentralization without full SEC registration, promoting domestic venture capital

Clarification of Institutional Custody: Clearly defines registration and custody standards for crypto intermediaries, enabling institutions like BNY Mellon and DTC to directly custody digital assets

Stablecoin Pressure and Rise of Tokenized Deposits: The bill may redefine stablecoins as digital cash tools, shifting market attention toward tokenized deposits or offshore yield alternatives like Ethena’s USDe

Other Catalysts: Clear pathways for token decentralization into commodities, frameworks for traditional asset tokenization, protections for developer reporting exemptions, and tax exemptions and clarity for small daily crypto payments and staking taxes.

Frequently Asked Questions

Why does JPMorgan expect the CLARITY Act to be approved by mid-year?

JPMorgan analysts believe that the House has advanced the CLARITY Act, and the White House is actively mediating behind closed doors between industry and banking sectors, making it most likely that legislation will be completed around mid-year. Once approved, it is expected to serve as a market catalyst in H2 2026.

What are the main obstacles currently facing the CLARITY Act?

The two main obstacles are stablecoin yield concerns (banking sector worries about deposit outflows) and conflict of interest issues (Democrats pushing restrictions on high officials’ participation in crypto finance). Negotiations are ongoing in White House-led closed-door talks, and compromises remain possible.

What is JPMorgan’s long-term target price for Bitcoin?

JPMorgan analysts reaffirmed this month that the long-term target price for Bitcoin is $266,000, based on a comparison method adjusted for gold price fluctuations. As of press time, Bitcoin is trading at around $65,425, down over 2% in the past 24 hours.