Crypto markets have lacked conviction, as traders struggle to identify a catalyst strong enough to lift prices out of their current lull. Bitcoin has remained range-bound around mid-$60,000, while ether is trading around $2,000, and volumes across major exchanges have thinned.

The digital assets market is thirsty for a solid catalyst, and JPMorgan says it has identified one — market structure legislation in the U.S., called the Clarity Act.

"While sentiment remains negative in crypto markets, we continue to believe that a potential approval of the market structure legislation most likely by mid year could serve as a positive catalyst for crypto markets into the second half of the year," analysts led by Nikolaos Panigirtzoglou said in a report.

While the market faces broader hesitation among both retail and institutional participants, regulatory ambiguity has also weighed on sentiment, leaving larger investors cautious about deploying new capital.

Market participants say that without tangible progress on a coherent regulatory framework, sidelined capital is unlikely to return in force. This is where the Clarity Act would be a decisive catalyst for the digital assets market, according to JPMorgan.

A comprehensive framework defining oversight, token classifications and exchange obligations would remove one of the biggest overhangs on the asset class: uncertainty. With clearer rules of the road, large asset managers, pension funds and corporate treasuries that have so far remained cautious could gain the confidence and compliance cover to increase allocations.

That wave of institutional participation, in turn, could deepen liquidity, compress volatility and unlock new product development, from structured offerings to broader tokenized assets.

A bill stuck in limbo

At its core, the proposed bill would define oversight across the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), classifying tokens as either digital commodities or securities.

The bank's analysts said placing major tokens under CFTC jurisdiction would reduce compliance burdens and legal uncertainty. A “grandfather” clause would allow certain tokens tied to spot exchange-traded funds listed before Jan. 1, 2026, including XRP, solana, litecoin, hedera, dogecoin and chainlink, to be treated as commodities.

The proposal would also let new projects raise up to $75 million annually without full SEC registration, subject to disclosure rules. The analysts said that the grace period could revive onshore issuance, venture funding and deal activity that has shifted overseas.

However, the leading U.S. effort to establish the federal crypto rules has stalled in the Senate after months of talks and missed timelines, leaving the bill in limbo as lawmakers wrangle over key provisions.

A scheduled Senate Banking Committee markup was postponed in early 2026 after Coinbase (COIN), the largest U.S. crypto exchange, publicly withdrew its support for the bill, saying the current text could hamper innovation, weaken competition, and restrict features like stablecoin rewards.

Coinbase’s opposition exposed divisions among industry players and lawmakers, even as some analysts and banking voices say the bill’s core goals, clearer SEC/CFTC oversight and defined regulatory pathways, keep momentum alive.

Coinbase CEO Brian Armstrong said earlier this month that banking trade groups, rather than individual banks, were largely responsible for the stalled talks over U.S. crypto market structure legislation.

In a market still heavily driven by sentiment and flows, a decisive regulatory breakthrough could act as a powerful catalyst, the kind that doesn’t just steady prices, but potentially propels them sharply higher.

Read more: From Wall Street to Web3: This is crypto’s year of integration, Silicon Valley Bank says