Author
Ahmed Barakat
Author
Share
Jefferies analyst Andrew Moss and his team warned Monday that the CLARITY Act, the defining crypto regulation bill of this Congress, faces a compressing Senate window, with Polymarket odds of passage by end-2026 now sitting at 48%, down from 70% in mid-May.
The bank is flagging elevated near-term crypto volatility across both tokens and blockchain-related equities as the legislative outcome sharpens into a binary event.
The drop in prediction-market odds reflects three converging pressures: unresolved ethics provisions, outstanding disputes over illicit finance language, and a Senate floor calendar that offers roughly 20 legislative days before the August recess.
Miss that window and the market structure bill does not simply get rescheduled, it gets repriced entirely. “Failure to pass Clarity before the August recess could push the bill out to next year, or even later, if Democrats flip the Senate in November,” Moss and his colleagues said in the note.
Jefferies specifically flagged Coinbase (COIN), Circle (CRCL), and Bullish (BLSH) as the crypto-linked equities most exposed to legislative-driven swings, alongside select tokens.
Discover: The Best Token Presales
CLARITY Act: The August Recess Is the Real Deadline
The CLARITY Act cleared the Senate Banking Committee on May 14 in a 15-9 bipartisan vote, drawing all Republican members and two Democrats. That looks like momentum. The procedural math that follows does not.
Before any full Senate floor vote, lawmakers must reconcile two separate committee-passed versions, the Banking Committee’s bill and the Senate Agriculture Committee’s Digital Commodity Intermediaries Act, then align the merged text with the House-passed H.R. 3633 (which cleared 294-134 in July 2025), and clear a 60-vote cloture threshold to overcome a filibuster.
That is four distinct procedural gates, compressed into approximately 20 working legislative days before recess. First, the Banking and Agriculture versions contain substantively different approaches to CFTC jurisdiction over digital commodities, and no merged text has been published as of late June.
Second, the ethics provisions attached during committee markup have not found consensus, with some members seeking to strip them and others treating them as non-negotiable. Third, law enforcement agencies have raised objections to specific DeFi exemption language, adding another negotiating variable that could slow floor scheduling.
JPMorgan made a similar call earlier in June, warning that the crypto market structure bill may have only a limited window for passage this year as the congressional calendar tightens ahead of midterm elections.
The stablecoin yield debate, which Standard Chartered has estimated could redirect up to $500 billion in deposits if resolved permissively, remains an open variable that complicates any rushed compromise. If the bill slips past August, it re-enters a Senate environment potentially reshaped by November elections, at which point Democratic gains could shift the 60-vote calculus against it entirely.
What Jefferies Is Actually Flagging, And What Polymarket Already Priced In
The Jefferies note is not the first sell-side warning on this timeline, but the 22-point collapse in Polymarket odds since mid-May gives it harder backing than prior analyst commentary.
Galaxy Digital’s Alex Thorn cut his firm’s passage probability from 60% to 50% on June 26, citing calendar compression rather than policy disputes as the primary driver. Jefferies has now landed below that level on the prediction market, suggesting the street is converging on sub-50% as the base case.
What the Jefferies note adds is equity-specific granularity. For Coinbase, the exposure is direct: the exchange’s product suite, staking, lending, rewards on USDC holdings, operates in the regulatory gray zones the CLARITY Act would either sanction or constrain. A delay preserves the current ambiguity but also preserves enforcement risk, particularly with an SEC that has shown willingness to act on custody and yield products.
For Circle, the situation is genuinely mixed: the current bill text would reportedly close the loophole enabling third parties like Coinbase to offer rewards on USDC, which could suppress USDC growth metrics, while a delay gives Circle more runway to diversify revenue beyond stablecoin reserve income before that provision lands.
The detail most readers are missing is the asymmetry in the delay scenario. Recent guidance from the SEC, CFTC, and OCC has improved the near-term operating environment for institutional crypto participants, but Jefferies is explicit that agency guidance is reversible.
A future administration can undo every no-action letter and staff bulletin without legislation. The CLARITY Act would create durable statutory clarity that agencies cannot unwind unilaterally, that distinction is what makes the bill material beyond a single news cycle.
Don’t Miss Out on Our $1,000 USDT Airdrop on ByBit
