CLARITY Act 2025: How This Landmark U.S. Crypto Bill Could Reshape the Market
- What’s in the CLARITY Act and GENIUS Act?
- Could Crypto Develop an "On-the-Run" Market Like Bonds?
- Why Institutional Investors Are Betting on Crypto Blue Chips
- The Senate Hurdle: What’s Next?
- FAQs: Your CLARITY Act Questions Answered
The U.S. House of Representatives just passed two historic crypto bills—the CLARITY Act and the GENIUS Act—that could redefine how digital assets are regulated, traded, and valued. Bitwise CIO Matt Hougan suggests these laws might create a "blue-chip" crypto hierarchy, mirroring traditional finance’s bond markets. With institutional money flooding into bitcoin and Ethereum, altcoins risk getting left behind. Here’s what you need to know.
What’s in the CLARITY Act and GENIUS Act?
The CLARITY Act, approved on July 17, 2025, establishes clear definitions for digital assets and splits regulatory oversight between the SEC (for securities) and CFTC (for commodities). Meanwhile, the GENIUS Act—the first federal crypto law in U.S. history—sets national standards for stablecoin issuance. As Matt Hougan of Bitwise puts it: "This isn’t just regulation; it’s a roadmap for institutional adoption."
Could Crypto Develop an "On-the-Run" Market Like Bonds?
Hougan’s provocative thesis compares the potential impact to Treasury bonds, where newly issued "on-the-run" securities trade at premiums due to liquidity. Crypto’s version? Bitcoin and ethereum are already pulling ahead in 2025, with year-to-date gains dwarfing smaller altcoins. Data from TradingView shows BTC and ETH up 58% and 42% respectively, while the median altcoin languishes at +7%.
"THE MOST IMPORTANT CRYPTO BILL IN U.S. HISTORY just PASSED CONGRESS." — @XRP_investing
Why Institutional Investors Are Betting on Crypto Blue Chips
The bills turbocharge three trends:
- ETF Dominance: Bitcoin and Ethereum ETFs now hold $87B in assets (CoinGlass), sucking liquidity from smaller tokens.
- Regulatory Arbitrage: XRP’s post-SEC settlement clarity made it a sudden institutional favorite, surging 31% in Q2 2025.
- Stablecoin Standards: The GENIUS Act could make USD-pegged tokens the plumbing for DeFi—and a backdoor for TradFi adoption.
The Senate Hurdle: What’s Next?
While the House passage is monumental, the Senate remains a wildcard. As one crypto lobbyist quipped: "Getting politicians to agree on crypto is like herding cats on espresso." But industry leaders argue even partial adoption could unlock $120B in institutional capital currently sidelined by regulatory uncertainty.
FAQs: Your CLARITY Act Questions Answered
How does the CLARITY Act define cryptocurrencies?
The Act creates a bright-line test: assets granting profit-sharing rights are securities (SEC jurisdiction), while pure transactional tokens are commodities (CFTC).
Could this hurt decentralized projects?
Potentially. The BTCC research team notes that "regulatory-safe" projects like Ethereum may benefit, while truly decentralized networks face compliance headaches.
When would these laws take effect?
If Senate-approved, the GENIUS Act’s stablecoin rules could roll out by Q1 2026, with CLARITY provisions phased in over 18 months.
