Written by: Rita

Kalshi predicts the probability of the CLARITY bill passing in the market has surged back to over 30%, whereas a week ago, most client conversations assumed it would fail. Bernstein noted in a report released on September 14, 2026, that the latest Senate Republican draft has made substantial concessions on Trump's ethical provisions and added “new circuit breaker” clauses addressing concerns about deposit outflows from community banks. The market had previously widely bet on the bill's failure, and Bernstein believes this bet may face a reversal.

The full name of the CLARITY bill is the “Digital Asset Market Clarity Act,” aimed at establishing a federal regulatory framework for the U.S. cryptocurrency market. It primarily delineates the regulatory boundaries between the SEC and the CFTC, clarifies registration and compliance obligations for digital commodity exchanges, and defines the rules for stablecoin profits. In simple terms, this bill sets the rules for the crypto industry, determining the certainty of regulation through its passage or failure.

Bernstein analyst Gautam Chhugani listed three judgments in the report. The ethical concessions are close to the limits that Democrats can achieve. Without CLARITY is the worst outcome, and it is the same for the banking lobbying group. The political landscape of the midterm elections makes some Senate Democrats sensitive to being labeled anti-crypto.

Ethical Concessions Nearing Limits

Last week, most client conversations assumed CLARITY would fail, inferring that the CFTC and SEC would enter a frenzy of rule-making. Bernstein pointed out that CLARITY has consistently fallen into the “hard to judge” category, with the political context surrounding Trump's ethical provisions being the major variable. The latest White House proposal may be the largest concession the Democrats can achieve on this issue.

Aside from the separation of crypto assets and “blind trust” conditions, the White House has agreed to give state attorneys general an enforcement role concerning the ethical provisions. Bernstein believes this could at least enable some minority Democrats to vote in favor during Tuesday's procedural vote, allowing for hope in last-minute negotiations before the final vote. The bill currently needs 60 votes to advance, with Republicans holding only 53 seats, requiring support from at least 7 Democratic senators.

Without CLARITY is the Worst Outcome

The CLARITY bill has undergone a marathon of bipartisan negotiations, addressing challenges such as stablecoin profits, ethical texts, community bank concerns, and the structure of the DeFi market. Multiple interest groups and lobbying entities have engaged in the negotiations. The banking lobbying group is most concerned about the impact of stablecoin profits on community banks, ensuring at least some protective measures on key concerns.

Bernstein noted that if CLARITY fails, the status quo could worsen. Third-party platforms can continue to provide full returns on idle balances of stablecoins, and in a potential banking crisis, deposits flowing into stablecoins that are increasingly similar to deposits will lack safeguards. Even if the bill passes, it will not change the market overnight, as the legislation stipulates a 360-day implementation period after enactment.

Midterm Election Politics Impact Voting

As the midterm elections approach, some Senate Democrats face the political risk of being labeled anti-crypto. Crypto lobbying groups have supported bipartisan candidates in past election cycles, with their funding levels capable of exerting pressure in key districts. Offending a well-funded “single-issue” voting base is not ideal for Democratic senators seeking re-election.

Bernstein believes this electoral political pressure may push some minority Democrats to favor a yes vote in the procedural voting, preserving the possibility of advancing the bill. The time window for the midterm elections has further amplified this pressure, making crypto policy positions an actual issue in some districts.

This Week’s Catalysts are Dense

Bernstein noted that this week is dense with market catalysts, with procedural voting on Tuesday and the Federal Reserve's interest rate decision on Wednesday. A hawkish Fed combined with the failure of CLARITY would result in significant retracement, and the current market positions are bearish. Bernstein believes any positive surprises have not been priced in. Both the native crypto market and crypto stocks could experience significant volatility, depending on the outcome.

Bernstein believes that the failure of CLARITY would lead the SEC and CFTC to turn towards self-regulation. If crypto stocks experience significant initial retracement as a result, subsequent rule implementation might actually offer clarity and drive stock price recovery.

Multiple Crypto Companies Rated to Outperform

Bernstein gives Circle (CRCL) an outperform rating with a target price of $140. Coinbase (COIN) receives an outperform rating with a target price of $330. Figure (FIGR) is rated outperform with a target price of $70. Robinhood (HOOD) is rated outperform with a target price of $160. Strategy (MSTR) receives an outperform rating with a target price of $350. Sharplink (SBET) is rated outperform with a target price of $24. Bullish (BLSH) is rated market perform with a target price of $50.

As of the close on September 11, 2026, Circle’s stock price is $90.60, Coinbase’s is $175.26, Figure’s is $34.87, Robinhood’s is $112.57, Strategy’s is $130.97, Sharplink’s is $8.88, and Bullish’s is $35.12.

If CLARITY passes, the regulatory framework for the crypto industry will take effect 360 days later. If it fails, where will the rule-making of the SEC and CFTC head, and who will be able to price it in advance?

Disclaimer

This article is a summary and interpretation of a third-party brokerage report (Bernstein, September 14, 2026) by Chao Xiang Research, combined with publicly available market information. The ratings, target prices, profit forecasts, and related judgments referenced in the text reflect the opinions of the brokerage’s analysts and represent the stance of their organizations, not the views of Chao Xiang Research, and do not constitute any investment advice.

The market is risky, and decisions should be made independently. This article should not be used as the basis for buying or selling any securities.