JPMorgan Sees US Crypto Bill as Second Half Market Catalyst

TLDR

• JPMorgan expects US crypto bill approval by midyear

• Bill would split SEC and CFTC oversight of digital assets

• Grandfather clause may cover XRP, SOL, LTC, HBAR, DOGE, LINK

• Senate talks stall over stablecoin yield and conflict rules

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Crypto markets remain range-bound, yet JPMorgan sees a possible turning point ahead. The bank said U.S. market structure legislation could pass by midyear and support prices later in the year. Analysts believe clearer rules may restore institutional participation and deepen liquidity.

JPMorgan analysts, led by Nikolaos Panigirtzoglou, said approval of the bill could act as a catalyst. They noted that sentiment remains weak, but regulatory clarity may shift momentum in the second half. The legislation is widely known as the Clarity Act.

Market Structure Bill Faces Senate Delays

The proposed bill would define oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Tokens would be classified as digital commodities or digital securities under a federal framework. Lawmakers in the House have advanced the bill, while Senate talks continue.

Two issues continue to delay progress in the Senate. One involves whether stablecoin issuers may offer yield to holders. Banking groups argue that yield-bearing stablecoins may draw deposits away from banks and raise financial stability concerns.

Another dispute centers on conflict-of-interest rules. Some lawmakers want restrictions on senior officials and their families engaging in crypto-related activities. The White House has hosted closed-door meetings between crypto firms and banking groups, while negotiations continue.

JPMorgan Lists Eight Potential Catalysts

JPMorgan outlined eight areas that could support markets if the bill passes. The analysts said a clear classification framework may ease compliance burdens for major tokens. A grandfather clause may allow certain ETF-linked tokens to fall under CFTC oversight.

Tokens such as XRP, Solana, Litecoin, Hedera, Dogecoin and Chainlink may qualify under that clause. This could reduce legal uncertainty and support broader trading access. Analysts noted that commodity-style oversight has supported institutional activity in bitcoin and ether derivatives.

The bill would also provide a fundraising grace period for new projects. Companies could raise up to $75 million annually without full SEC registration during early development. JPMorgan said this may support domestic venture activity rather than offshore issuance.

In addition, tokens sold as securities may transition to commodity status once sufficiently decentralized. This pathway may enable wider secondary trading and allow traditional brokers to engage. Clearer custody rules may also allow banks such as BNY Mellon and State Street to hold digital assets directly.

Institutional Participation in Focus

JPMorgan said clearer rules may unlock institutional capital currently on the sidelines. Large asset managers and pension funds often require defined regulatory frameworks before allocating funds. The bank stated that clarity may encourage deeper liquidity and new product development.

The legislation also addresses tokenization of traditional securities and real-world assets. It confirms that tokenized instruments remain subject to existing securities laws. Firms such as Intercontinental Exchange and State Street are building infrastructure for tokenized markets.

The bill further exempts miners, validators and software developers from broker-style reporting during development. Small transaction tax exemptions and clearer staking tax treatment are also included. Analysts said these provisions may support broader crypto payment use and clarify staking income.

JPMorgan added that the framework may influence stablecoin dynamics. The bank wrote that certain provisions could shift attention toward tokenized deposits or offshore yield-bearing alternatives. For now, markets remain cautious, but JPMorgan maintains that midyear approval may serve as the catalyst investors seek.

Meanwhile, Ripple CEO Brad Garlinghouse has urged lawmakers and banking groups to act in good faith during negotiations. He said regulatory clarity is preferable to continued uncertainty, even if the framework is not perfect. His remarks come as talks between crypto firms and banking associations continue in Washington.

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