Clarity Act passage odds on Polymarket fall as Senate talks stall

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CLARITY Act odds fall

Highlights

Polymarket odds for the Clarity Act's passage dropped about 30 percentage points since January amid stalled Senate negotiations and unresolved ethics concerns.
Senator Ruben Gallego and other Democrats refuse to support the bill on the Senate floor without added bipartisan ethics provisions to address digital asset conflicts of interest.
Crypto industry executives argue that regulatory uncertainty delays investment, urging Congress to enact the Clarity Act before the August recess to clarify SEC and CFTC jurisdictions.

Senate negotiations and market signals

As reported by CoinDesk, traders have steadily lowered expectations for the legislation as Senate negotiations remain stuck over ethics provisions needed to secure Democratic support.

The contract's odds have dropped by about 30 percentage points from when the market launched on Jan. 11, after rising as high as 82% on Feb. 19. Since early May, sentiment has weakened as the Senate calendar tightens and doubts persist over whether lawmakers can build the bipartisan backing required to move the bill forward.

Lawmakers earlier this month were working on revised legislative text expected the following week, but it had not yet won Democratic support. President Donald Trump was expected to meet Senate Republicans on Thursday to discuss the measure, but as of Friday there is no public readout from that White House meeting.

Sen. Ruben Gallego of Arizona, one of two Democrats who voted to advance the bill from the Senate Banking Committee, has repeatedly said he will not back it on the Senate floor without a bipartisan ethics provision. Other Democrats are also raising conflict-of-interest concerns involving public officials and digital assets, leaving one of the bill's main obstacles unresolved.

Crypto industry pushes for regulatory clarity

If enacted, the Clarity Act would create a federal framework for digital asset markets by drawing a clearer line between tokens overseen by the Securities and Exchange Commission and those regulated by the Commodity Futures Trading Commission. Supporters say that would replace years of regulation by enforcement with rules set directly by Congress.

Industry executives repeat that case during a House hearing on Friday marking one year since the chamber passed the legislation. Nova Labs executive Sarah Aberg says regulatory uncertainty delayed investment in the Helium wireless network after the SEC sued the company in a case that was later settled, adding that the industry is seeking the right regulation from the right regulator.

Bullish executive Randy Abernethy says companies need a rule book that keeps digital asset markets under U.S. oversight instead of pushing firms overseas. WisdomTree's Ryan Louvar says legislation would provide rules that endure across administrations, while Coin Center's Jason Sommensatto says the bill protects software developers without weakening anti-money laundering or investor safeguards.

With Congress approaching its August recess and only a limited number of legislative weeks left afterward, traders are increasingly doubtful the bill reaches the president's desk before year-end.

Our earlier analysis of Coinbase (COIN) highlighted persistent selling pressure and weak momentum, with the stock trading below key moving averages and technical indicators leaning bearish. We also noted that while Brian Armstrong’s innovation updates offered some optimism, macro headwinds and ongoing regulatory scrutiny were still weighing on sentiment and keeping the near-term outlook range-bound.

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