The chances of the CLARITY Act becoming US law by 2026 have slipped sharply after the Senate chose to prioritise sanctions on Russia and Iran, along with federal nominations, ahead of its August break.
Prediction markets now put the likelihood of the wide‐ranging crypto market structure bill passing at roughly one in three, with traders increasingly doubtful the chamber can complete the complex legislative process in the limited time available.
Senate Majority Leader John Thune has yet to schedule floor time for the CLARITY Act, tightening an already demanding timetable before senators leave Washington for their summer recess, which is due to start after 7 August. Initial procedural steps on the bill remain possible in the week beginning 3 August, but other business is currently dominating the agenda.
Alex Thorn, head of research at Galaxy Digital, said timing has now become the bill’s principal obstacle. He has argued that senators needed to begin formal floor consideration by 30 July to allow sufficient space for procedural votes and debate, noting that the decision to move other legislation first has made that schedule “increasingly difficult”.
Thorn still sees a path for a vote after the recess, but warns that senators would then return to Washington much closer to the November midterm elections, when campaigning typically crowds out complex, bipartisan negotiations.
Filibuster arithmetic tightens
Any version of the CLARITY Act brought to the floor would need 60 votes to clear the Senate filibuster. Republicans currently hold 53 seats, but Thorn believes effective Republican backing for the bill may sit closer to 50.
He points out that Josh Hawley and Rand Paul have not publicly committed to supporting the measure, while Mitch McConnell’s hospitalisation could prevent him from taking part in a vote. Under that scenario, Republicans would have to secure 10 Democratic votes to advance the legislation.
The Senate Banking Committee approved its version of the CLARITY Act in May by 15 votes to nine, with two Democrats joining Republicans. Both of those Democrats stressed at the time that their support in committee did not guarantee a vote in favour on the Senate floor unless further changes were made, particularly to the provisions governing public officials’ crypto holdings and potential conflicts of interest.
President Donald Trump subsequently accepted the addition of tighter ethics rules, a shift that helped push prediction market platform Polymarket’s assessed odds of passage to 53% on 21 July. Since then those odds have fallen back, with the market showing about 34% at the time of writing.
Another prediction platform, Kalshi, has traders assigning a 42% probability that federal crypto market structure legislation will become law before the end of 2026.
Partisan divide over Trump’s backing
SkyBridge Capital founder Anthony Scaramucci has suggested opposition from Democrats may continue precisely because Trump has embraced the bill as part of his wider political programme.
“They will do everything they can to block it because he wants it,” Scaramucci said.
Cardano founder Charles Hoskinson has voiced a similar view, warning that the “Trump narrative” has turned the debate over crypto regulation into a partisan fight.
Democratic lawmakers have also raised substantive concerns about whether the proposed ethics regime is robust enough, pointing to crypto‐related activities linked to Trump’s family. In addition, they have argued for tougher consumer protections, stronger enforcement powers for regulators and clearer rules to cover officials’ indirect financial interests.
Republicans have already agreed to several changes in an effort to entice more Democratic votes, but the revised text has not yet produced enough public commitments to suggest the bill can reach the 60‐vote mark. Any significant alterations made during Senate consideration would also force the legislation back to the House of Representatives, adding another step before it could be sent to Trump’s desk.
Market reaction and regulatory status quo
Bitcoin was trading around $63,800 when the Senate delay became clear, down roughly 1.6% on the previous session after fluctuating between about $62,772 and $64,953. The slide in price coincided with the legislative setback, although the timing alone does not prove the CLARITY Act developments were responsible for the broader market move. Analysts note that macroeconomic conditions, derivatives positioning and shifts in demand can all influence day‐to‐day price changes.
US spot Bitcoin exchange‐traded funds recorded net outflows of $11.64m on 27 July, led by an $8.82m withdrawal from BlackRock’s IBIT. By contrast, Ether funds attracted $9.23m of new money, while XRP ETFs saw inflows of about $592,000.
For US‐based crypto investors, any further delay in the Senate would leave the current patchwork regulatory framework in place, combining oversight from the Securities and Exchange Commission and the Commodity Futures Trading Commission with court rulings and state‐level rules, rather than moving towards a single, unified federal market structure.
The CLARITY Act is not yet considered dead, but failure to start the Senate process before the August recess would leave its prospects for becoming law by 2026 resting on a narrower, post‐election window later in the congressional calendar.
