Bessent Goes All-In on Clarity Act as Bitcoin Bleeds: Is This the Lifeline Crypto Desperately Needs?

Clarity Act Approval Gains Momentum as Bitcoin Slides and Senate Prepares for Crucial Vote

As digital asset markets struggle through one of their most turbulent periods in recent months, momentum is quietly building in Washington around a piece of legislation that many believe could reshape the future of crypto regulation in the United States. The long-debated Digital Asset Market Structure Bill, widely known as the Clarity Act, is gaining renewed political backing just as Bitcoin and the broader crypto market experience sharp declines.

The convergence of market stress and regulatory progress has intensified attention on Capitol Hill. Treasury Secretary Scott Bessent has publicly voiced his support for the Clarity Act, signaling a potential turning point in how the U.S. government approaches oversight of cryptocurrencies and blockchain-based assets.

Source: Xpost

After clearing the House of Representatives in 2025 under bill number H.R. 3633, the legislation is now expected to reach the Senate floor in the coming months. Lawmakers from both parties suggest that negotiations are accelerating, driven by growing concern that regulatory uncertainty is worsening market instability.

For investors tracking Clarity Act news today, the signal from Washington is unmistakable: clearer rules for crypto may finally be within reach.

A Market in Turmoil Raises Regulatory Urgency

The renewed push for Clarity Act approval comes amid a steep downturn across digital asset markets. Bitcoin recently fell to a low near $60,074, marking its weakest level since October 2024. Ethereum slipped below $1,800, while major altcoins including Solana, XRP, and BNB recorded losses exceeding 13 percent in a matter of days.

At the time of writing, Bitcoin is trading around $64,693, down roughly 10 percent in the last 24 hours alone. Daily trading volume remains elevated at nearly $20 billion, reflecting heightened fear-driven activity. Notably, Bitcoin is now trading almost 48 percent below its all-time high of $126,198, a level reached during the peak of the previous bull cycle.

Source: CMC

The sell-off has not been isolated to crypto. U.S. equity markets have also shown signs of stress, with the Nasdaq sliding to its lowest point since November. The S&P 500 and Dow Jones Industrial Average followed suit, while Asian markets mirrored the downturn. Analysts describe the current environment as a classic risk-off phase, where investors retreat from speculative assets amid broader economic uncertainty.

Against this backdrop, lawmakers appear increasingly concerned that the absence of clear regulatory frameworks is amplifying volatility rather than containing it.

What the Clarity Act Is Designed to Do

If approved, the Clarity Act would mark one of the most significant regulatory overhauls in the history of U.S. digital asset policy. At its core, the bill seeks to define clear jurisdictional boundaries between regulators, an issue that has long plagued the crypto industry.

The proposal classifies digital assets operating on sufficiently decentralized and mature blockchains as commodities rather than securities. Under this framework, the Commodity Futures Trading Commission would gain authority over spot markets for these assets, while the Securities and Exchange Commission would retain oversight of tokens that meet traditional investment contract criteria.

Supporters argue that this distinction is critical. For years, overlapping and sometimes conflicting guidance from regulators has left companies unsure whether they are complying with the law. The Clarity Act aims to replace that ambiguity with a standardized rulebook.

In addition to market classification, the bill introduces investor protection measures, including mandatory asset segregation, enhanced disclosures, and clearer stablecoin oversight. These provisions are designed to reduce systemic risk and prevent a repeat of past collapses that left retail investors exposed.

Treasury Secretary Bessent has described the proposal as “very good regulation,” stressing that clear rules are not anti-innovation but essential for sustainable growth.

Political Support Builds Across Party Lines

One of the most notable developments surrounding the Clarity Act is the level of bipartisan engagement. Senator Cynthia Lummis, a long-time advocate for digital asset innovation, has confirmed that lawmakers from both sides of the aisle are working “every single day” to finalize the bill’s path forward.

According to individuals familiar with the discussions, momentum has increased as market conditions deteriorate. The argument gaining traction is that regulatory paralysis is no longer neutral but actively harmful during periods of stress.

High-profile investors have also weighed in. Galaxy Digital founder Mike Novogratz recently suggested that the bill enjoys strong political backing, pointing to the growing influence of crypto-focused political action committees. These groups, he noted, now represent a significant source of campaign funding, making digital asset policy difficult to ignore.

Prediction markets appear to share this optimism. Data from Polymarket shows odds of Clarity Act approval rising to nearly 72 percent, reflecting growing confidence that the Senate will advance the bill.

Stablecoins Remain the Biggest Obstacle

Despite rising support, one critical issue continues to complicate the Clarity Act’s path forward: stablecoins.

A central point of contention is whether banks and crypto firms should be allowed to offer yield on stablecoin holdings. The White House has reportedly set a February 28, 2026 deadline for stakeholders to resolve this debate.

Crypto companies argue that yield-bearing stablecoins could attract capital, improve liquidity, and accelerate mainstream adoption. Banks, however, warn that such products could siphon deposits away from traditional financial institutions, potentially destabilizing the banking system.

This disagreement has become the final and most sensitive hurdle standing between the bill and full approval. Lawmakers are now tasked with balancing innovation against financial stability, a challenge that has defined much of the crypto policy debate.

Can Regulatory Clarity Restore Market Confidence?

As prices continue to slide, investors are increasingly asking whether Clarity Act approval could help stabilize the market.

Technical analysts point to the $55,500 level as a strong support zone for Bitcoin, with $70,000 emerging as a key resistance level if sentiment improves. While regulatory clarity alone is unlikely to trigger an immediate rally, many believe it could lay the groundwork for renewed institutional participation.

Large asset managers and financial institutions have repeatedly cited regulatory uncertainty as the primary barrier to deeper involvement in crypto markets. A clear framework could unlock sidelined capital, particularly from pension funds and conservative investment vehicles.

Still, skeptics caution that macroeconomic pressures, including recession fears, geopolitical tensions, and tightening financial conditions, may continue to weigh on risk assets regardless of legislative progress.

A Pivotal Moment for U.S. Crypto Policy

The Clarity Act arrives at a critical juncture. Markets are under pressure, investor confidence is fragile, and policymakers face mounting criticism for years of inaction. In this context, the bill represents more than regulatory reform; it is a test of whether the U.S. can lead in digital asset governance or fall behind other jurisdictions.

For now, volatility remains the dominant theme. But as Senate discussions intensify and political support consolidates, the prospect of clear, consistent crypto regulation is closer than it has ever been.

Whether Clarity Act approval arrives in time to calm markets remains uncertain. What is clear is that the outcome will shape the trajectory of digital assets in the United States for years to come.

hokanews.com – Not Just Crypto News. It’s Crypto Culture.

Writer @Erlin
Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.
 
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