CLARITY Act could unlock up to 95% of institutions’ crypto demand
Crypto adviser Ric Edelman says the CLARITY Act could become a turning point for crypto adoption. He predicts that if the CLARITY Act becomes law, up to 95% of institutions that currently hold no crypto could start investing.
Edelman argues the main blocker is regulatory uncertainty, not lack of interest. He notes a widening disconnect: crypto prices have lagged while major Wall Street firms keep expanding blockchain and tokenization efforts. He cited ongoing activity from BlackRock, JPMorgan, Morgan Stanley, Franklin Templeton, State Street, Invesco, and Fidelity.
Institutional demand is already building. Edelman says 95% of non-crypto institutions expect a first allocation this year, while around three-quarters of existing crypto holders plan to increase exposure. However, capital has not arrived at the scale many expected, due to U.S. legislative uncertainty, periodic Bitcoin ETF outflows, and political resistance from lawmakers such as Bernie Sanders and Elizabeth Warren.
At the legislative level, the CLARITY Act faces Senate scrutiny. Critics argue that DeFi-related provisions may weaken anti-money-laundering safeguards. The Alliance to End Human Trafficking urged Senate leaders to revisit Section 604, which would incorporate the Blockchain Regulatory Certainty Act.
Timeline risk remains. A House hearing is scheduled for July 17, but the Senate has not set a floor vote date. Edelman references White House crypto adviser Patrick Witt’s view that passage could occur by July 4, but warns that delays could hit sentiment.
Trading takeaway: Edelman also reiterates an optimistic long-term thesis, saying Bitcoin could reach $150,000+—with regulatory progress likely a key driver.
Bullish
The core bullish driver is the potential regulatory clarity from the CLARITY Act. Edelman’s thesis links a credible legal framework to a large, pent-up institutional allocation window (up to 95% of currently unexposed institutions). Historically, major approval pathways for U.S. crypto rules—especially those that reduce compliance ambiguity—tend to improve risk appetite, tighten spreads, and support trend-following flows.
Short-term, the market may trade the bill’s headline risk. A pending Senate vote date (or lack of one), plus AML/DeFi safeguard controversies, can create volatility around BTC and liquid majors as traders price “pass vs delay” probabilities. Reference point: similar events where ETF-related expectations rose and fell showed that capital can rotate quickly on flow headlines.
Long-term, if the CLARITY Act advances as expected, it could structurally increase institutional access to crypto exposure and extend the adoption cycle beyond retail-driven momentum. That said, delays or failure would likely pressure sentiment and reinforce “regulatory overhang,” keeping allocation cautious until the next legislative milestone.