Galaxy Research Cuts CLARITY Act Passage Odds to 30% as Bipartisan Divide Persists

Galaxy Research has downgraded the probability of the Digital Asset Market Clarity Act passing in 2026 to just 30%, signaling that congressional momentum behind one of the most comprehensive U.S. crypto regulatory proposals has stalled despite steady vocal support from individual lawmakers.

The downgrade coincides with Senator Jon Husted (R-OH) publicly endorsing the legislation, arguing the bill is critical for maintaining American competitiveness in digital assets. The timing underscores a central tension: individual lawmakers champion the CLARITY Act, but structural conditions for passage remain unfavorable.

"The reduced odds of the CLARITY Act passing highlight the challenges of achieving bipartisan support for crypto regulation, impacting market confidence."

Galaxy Research

The CLARITY Act aims to draw a clear jurisdictional line between the SEC and CFTC over digital assets, a boundary contested in courts and enforcement actions for years. Proponents argue that without statutory clarity, U.S.-based projects will continue routing capital and development activity offshore. Husted framed the bill as essential for "U.S. leadership in digital assets," an argument that resonates with a Republican caucus broadly sympathetic to lighter-touch financial regulation. That support has not, however, translated into the cross-aisle consensus needed to move legislation through a closely divided Senate.

Opposition stems from more than ideological inertia. New York Attorney General Letitia James has formally opposed the CLARITY Act, warning that it would strip state regulators of fraud enforcement powers over crypto markets. That objection carries weight with Democratic lawmakers reluctant to preempt state-level consumer protections, particularly after a cycle of high-profile exchange collapses and retail investor losses. Traditional finance incumbents have also reportedly lobbied against provisions they view as giving crypto firms a competitive regulatory advantage.

Coinbase has been among the most aggressive industry voices pushing for a floor vote, treating the CLARITY Act as a top legislative priority. The exchange recently restructured its leadership with policy influence playing a central role in the reorganization, a sign of how much the company has tied its near-term business outlook to regulatory resolution. Corporate lobbying pressure, however, cannot substitute for the committee negotiations and vote-counting that actually move bills.

The 30% figure warrants context. Galaxy's probability estimates reflect legislative calendar constraints, floor scheduling, and the realistic number of persuadable votes, not binary calls on a bill's merit. A 30% figure in late July of a congressional session effectively signals that absent a dramatic shift in the political environment, the bill will not pass this year. That does not kill the legislation permanently. Comprehensive digital asset bills have stalled before and re-emerged in subsequent sessions with revised language and broader support. The more relevant question for market participants is what continued regulatory ambiguity costs in the interim: deferred institutional product launches, ongoing enforcement-by-litigation at the SEC, and a persistent discount on U.S.-domiciled crypto projects relative to peers operating under clearer foreign frameworks.

For the digital asset industry, the calculus is straightforward but uncomfortable. Each month without federal legislation is another month in which the SEC's enforcement posture, rather than a statutory framework, defines the rules of the road. Galaxy's downgrade is less a verdict on the CLARITY Act's policy merits than a realistic read of a Congress that has consistently found other priorities more urgent than resolving a decade-long jurisdictional dispute over digital assets.