JPMorgan predicts massive shift by mid-year

While the mood in the digital asset space currently feels heavy, the heavyweight analysts at JPMorgan believe a breath of fresh air is coming. 

According to a recent report from a team led by Managing Director Nikolaos Panigirtzoglou, a major piece of U.S. legislation could arrive just in time to flip the script for the second half of the year (2026).

The focus is on the " CLARITY Act ," a proposed market structure bill designed to finally give the U.S. crypto industry a clear set of rules. While the House has already moved the bill forward, it is currently the subject of intense debate in the Senate.

"While sentiment remains negative in crypto markets, we continue to believe that a potential approval of the market structure legislation most likely by mid year could serve as a positive catalyst for crypto markets into the second half of the year,"the analysts noted.

Related: JPMorgan analyst praises $60 billion growth of this crypto asset class

The sticking points and policy battles

Right now, the CLARITY Act has passed the House but is moving a bit slower through the Senate. Why? Because lawmakers are trying to fix some missing pieces in the "Genius Act." That was the first major crypto law, signed by President Donald Trump back in July, which focused on how stablecoins are handled.

There are still a few arguments holding things up. For example, crypto companies want to pay you interest (or "yield") for holding stablecoins. Traditional banks don't like this because they think people will move their money out of normal bank accounts. There are also debates about whether government officials should be allowed to trade certain types of crypto.

However, if these groups can shake hands on a deal, JPMorgan says the results will be huge. "If passed it will reshape market structure by providing regulatory clarity, ending 'regulation by enforcement,' promoting tokenization, and facilitating greater institutional participation," the analysts explained, as quoted by Bloomberg .

Trending on TheStreet Roundtable:

• Inflation data sends markets reeling

• Bitcoin, XRP slide after Trump confirms Iran strikes

• $144 trillion global money growth flashes warning sign

Eight reasons to feel optimistic

JPMorgan shared a "cheat sheet" of eight ways this new law could boost the market:

1. Defining the assets:It would decide if a token is a "commodity" or a "security." This is a big deal because commodities have fewer rules. Major names like XRP, Solana, Dogecoin, and Chainlink could end up in the easier "commodity" category.

2. Helping new projects:Startups could raise up to $75 million a year without having to deal with the most difficult government registrations.

3. A path to freedom:Tokens that start with lots of rules could "graduate" to having fewer rules once they become decentralised enough.

4. Big banks joining in:Giants like BNY Mellon could finally hold your crypto for you, making it feel more like a traditional investment.

5. Putting everything on the blockchain:It would be much easier to turn things like stocks or real estate into digital tokens.

6. Protecting the tech builders:People who write code or run the network (miners and validators) wouldn't be treated like stockbrokers.

7. Easier spending:You might get a tax break for small, everyday crypto payments—like buying a coffee.

8. New ways to save:Institutions might start using "tokenized deposits" instead of regular stablecoins. "If enacted, the provisions could weigh on U.S. stablecoins by recasting them more as digital cash instruments rather than investment deposits," the report noted.