JPMorgan Says CLARITY Act Could Spark Crypto Rally in Second Half

Crypto markets may see renewed momentum later this year if U.S. lawmakers approve comprehensive digital asset legislation by midyear, according to JPMorgan. The bank believes regulatory progress could provide support even as prices remain pressured following a recent market downturn.

At the center of attention is the proposed CLARITY Act, which investors view as a potential turning point after prolonged volatility.

JPMorgan: A “Positive Catalyst” for Digital Assets

In a recent research note, JPMorgan said passage of the CLARITY Act could serve as a meaningful catalyst for the crypto sector.

“If approved, the legislation would reshape market structure by delivering regulatory clarity, ending enforcement-driven oversight, advancing tokenization, and encouraging broader institutional participation”, the bank noted.

Analysts added that clearer rules could ease legal uncertainty that has weighed on trading volumes and discouraged some institutional investors.

For market participants, greater regulatory certainty could unlock fresh capital inflows, particularly from traditional financial institutions that have so far remained cautious. Increased involvement from banks and asset managers may enhance liquidity and potentially support higher valuations across major cryptocurrencies.

Legislative Outlook Remains Uncertain

Despite optimism, the bill’s future is not guaranteed.

Coinbase CEO Brian Armstrong recently said he sees a 90% likelihood that the CLARITY Act could pass by the end of April. Speaking to CNBC during the World Liberty Forum at Mar-a-Lago, Armstrong said Senate lawmakers are actively working to advance the legislation.

“The Senate has been incredible”, Armstrong said, adding that daily discussions are underway to move the bill forward.

Key Disputes: Stablecoin Rewards and Banking Concerns

One of the main sticking points involves whether crypto platforms such as Coinbase should be allowed to offer rewards to users holding stablecoins.

Banks have cautioned that yield-like incentives could divert funds from traditional deposits and create potential financial stability risks.

Armstrong said Coinbase has worked behind the scenes to promote constructive dialogue between crypto firms and banks, aiming for a “win-win” outcome. He added that only a limited number of issues remain unresolved and expressed confidence that, with compromise, the legislation could reach the president’s desk within months.