Bernstein Warns Crypto Could Fall If CLARITY Act Stalls in Senate

Prediction market Polymarket now puts the odds of the US CLARITY Act passing before the end of 2026 at just 31%. That is down 7 percentage points from a week ago and down 9 from a month ago. On Monday, August 3, analysts at Bernstein warned clients that crypto markets could take another hit if the Senate leaves for summer recess without a vote.

Bernstein sent the note to clients the same day the upper chamber of Congress is set to pause its work until fall. A missed deadline means more than a scheduling delay. For the analysts, it signals that the bill is stuck longer than the market expected back in spring.

The Senate stalls before it can vote

Analysts say the US Senate is due to begin its summer break by the end of this week. The CLARITY Act, the first full-scale framework for digital asset regulation in the US, aims to divide oversight between the SEC and the CFTC and set baseline rules for exchanges, custodians and stablecoins. It still has not reached a full floor vote.

The House of Representatives passed its own version of the bill back in the summer of 2025. The document has spent more than a year waiting on the Senate, where passage traditionally requires at least 60 votes rather than a simple majority. That threshold is exactly what turns the process into a drawn-out standoff between parties.

Even the Treasury Department has been pushing senators. On July 30, Treasury Secretary Scott Bessent publicly urged the Senate to vote immediately, invoking Bitcoin creator Satoshi Nakamoto and accusing Democrats of deliberately stalling the bill for political reasons. Democrats counter that they want stronger safeguards against conflicts of interest and money laundering.

Polymarket bets show 31% and a fast decline

The prediction market backs up Bernstein's concerns. On Polymarket, bets on the bill passing before year-end now sit at 31%, down 7 points over the past week and 9 over the past month. A month ago the figure was above 40%, meaning traders lost almost a quarter of their original confidence in under four weeks. Roughly $3.7 million has been wagered on that outcome.

Prediction market traders usually move faster than analysts' official forecasts. Such a quick drop suggests participants are already pricing in delay rather than betting on a last-minute breakthrough. Polymarket odds last moved this fast in spring, when the bill was still leaving committee.

Bernstein expects a sharp reaction, then a fall rebound

Bernstein analysts expect a failed Senate vote to trigger an immediate negative "knee-jerk reaction" from the industry. Bitcoin stands to take the biggest hit, since it is the most sensitive to regulatory headlines and typically the first asset to react to uncertainty out of Washington.

"From a tactical standpoint, we expect the crypto market to bottom and start showing momentum towards late Q3 and early Q4 prior to the midterms."

- Bernstein analysts, client report, August 3, 2026

The market could dip as early as this week, but Bernstein does not see a long-term threat. The firm views fall 2026 as a likely turning point, tied to the political calendar ahead of the midterm elections, when both parties will have an incentive to show voters tangible results.

Five numbers worth remembering

The numbers point to a gradual cooling of expectations rather than panic. Every week without a vote shaves a few percentage points off the odds of passage. That slow erosion worries analysts more than any single piece of bad news, since it shows the market growing tired of repeated delays. Still, 31% leaves the bill a real chance, just no longer the base case, more one scenario among several.

Regulators can move without Congress

Bernstein sees an upside to the delay too. If the bill fails, the Securities and Exchange Commission and the Commodity Futures Trading Commission would have extra motivation to act on their own, using existing authority instead of waiting on Congress.

That refers to Project Crypto, an initiative SEC Chairman Paul Atkins launched in July 2025 and later expanded into a joint effort with the CFTC that September. Bernstein expects the two agencies to move faster on interpretive guidance around token classification, clearer rules for DeFi protocols, and a temporary exemption for new projects that would otherwise fall under securities status.

That path would not replace full legislation, but it could remove some uncertainty for major venues like Binance while Congress keeps looking for a compromise. For startups, the temporary exemption often matters more than the law itself, since it lets them launch products now instead of waiting years for a court to settle a token's legal status.

Banks push back, White House hunts for a compromise

The biggest obstacle to the CLARITY Act is the banking lobby. Banks oppose the current draft because it would let crypto firms offer yield on stablecoins like USDT without the same capital and reserve requirements imposed on traditional financial institutions.

• Banks' position: they want equal rules for yield-bearing products across crypto and traditional finance.
• Republican Senator Thom Tillis and Democratic Senator Ruben Gallego have spent weeks negotiating a bipartisan compromise on ethics provisions in the bill.
• The White House is reportedly weighing a counteroffer on ethics received Thursday from negotiators.
• Bernstein's bet: even without the law, the market recovers by year-end thanks to regulatory action.
• The next window for a vote will not open until senators return from recess in the fall.

For Bitcoin and the broader market, the next few weeks will test nerves. If the Senate does leave without a vote, a short-term price dip looks likely. But Bernstein insists this is not a reason for long-term panic, rather another cycle of delay the market has seen before, dating back to 2025.

Our team at Kurslog tracks stories like this closely, since sharp moves in Bitcoin and Ethereum tend to show up in hryvnia exchange rates within hours. The real question now is not whether the bill passes, but how painful the wait until fall turns out to be.