Bitcoin Gains 2% Following Progress on the CLARITY Act, Coinbase and Circle Shares Surge
Bloomberg Analyst Says CLARITY Act Is Unlikely to Directly Impact Bitcoin
Bloomberg ETF analyst James Seyffart believes the CLARITY Act is unlikely to have a significant direct impact on Bitcoin’s price.
According to Seyffart, Bitcoin already has the regulatory framework that the bill aims to establish for the broader crypto industry. It is recognized as a commodity, has regulated futures markets, approved spot Bitcoin ETFs, and institutional-grade custody services.
His comments come amid ongoing debate over how much the CLARITY Act could reshape the crypto industry and which sectors stand to benefit the most.
On July 22, Senate Republicans released an updated version of the CLARITY Act. The revised bill includes provisions covering stablecoin rewards, SEC fundraising exemptions for token issuers, DeFi classification, anti-money laundering (AML) requirements, and the division of regulatory authority. However, the legislation still requires support from at least eight Senate Democrats to pass before the August recess.
Democrats on the Senate Banking Committee have voiced concerns. Senator Elizabeth Warren’s office argued that the bill’s ethics provisions remain inadequate, particularly regarding enforcement by the Department of Justice and limitations placed on state attorneys general.
Bitcoin already enjoys a relatively clear regulatory status in the United States. The U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs in January 2024, while the Commodity Futures Trading Commission (CFTC) has long classified Bitcoin as a commodity under the Commodity Exchange Act. Regulated Bitcoin futures markets and institutional custody services have also been operating for years.
As a result, Seyffart argues that Ethereum, Solana, and applications built on those networks have far more to gain from the CLARITY Act, as the legislation could finally provide the legal clarity these blockchain ecosystems have been seeking.
Former BitMEX CEO Arthur Hayes shares a similar view. Speaking at Consensus Miami, Hayes said Bitcoin’s price is driven primarily by global fiat liquidity rather than regulation. He also argued that Bitcoin derives much of its value from existing outside the regulatory framework that the CLARITY Act seeks to formalize.
Grayscale reached a similar conclusion, identifying Ethereum, Solana, BNB Chain, and Canton Network as the blockchain ecosystems best positioned to benefit from clearer regulations, particularly in tokenization, staking, and on-chain financial activity.
The updated bill also introduces rules covering stablecoin rewards, SEC fundraising exemptions for token issuers, DeFi classification, AML obligations for digital commodity exchanges and brokers, and tokenization frameworks.
Ethereum currently hosts around $149.7 billion of the roughly $310 billion stablecoin market, while Solana holds approximately $15.3 billion. Meanwhile, Circle’s USDC has a market capitalization of nearly $73.3 billion, highlighting why both Circle and Coinbase are expected to benefit directly from the proposed legislation.
Indirect Benefits for Bitcoin
Although the CLARITY Act may not directly affect Bitcoin, it could still provide indirect support.
Earlier this year, Citi lowered its 12-month Bitcoin price target from $143,000 to $112,000, citing slower legislative progress and weaker ETF flow expectations. In July, the bank reduced its target again to $82,000 while cutting its forecast for Bitcoin ETF inflows over the next year from $10 billion to zero.
According to Citi, greater regulatory certainty could boost demand for Bitcoin ETFs, expand distribution through banks and wealth management platforms, and reduce the overall risk premium investors assign to crypto assets.
Bitwise Chief Investment Officer Matt Hougan also believes the CLARITY Act would transform today’s favorable regulatory environment into permanent law, providing institutional investors with greater confidence when allocating capital to Bitcoin and other digital assets.
Coinbase Institutional Research has echoed that view, arguing that clearer regulations would accelerate the integration of crypto with traditional finance. However, because Coinbase stands to benefit directly from the legislation, its analysis should be viewed with that potential conflict of interest in mind.
Market Reaction and Possible Outcomes
On July 21, Coinbase shares surged 9.6%, while Circle gained 8.6% following progress in negotiations surrounding the CLARITY Act. Bitcoin also rose around 2%, closing near $66,417.
The stronger rally in Coinbase and Circle suggests investors believe these companies stand to benefit more directly from the legislation than Bitcoin, although one trading session alone is not enough to draw definitive conclusions.
If the CLARITY Act passes with bipartisan support, it would provide greater legal certainty for crypto exchanges, DeFi platforms, stablecoins, token issuers, and tokenization projects. Coinbase, Circle, Ethereum, and Solana are widely expected to be among the biggest beneficiaries.
Bitcoin could also benefit through stronger ETF inflows and increased institutional investment, even though the legislation would not directly change the Bitcoin network itself.
On the other hand, if the bill fails to pass before the August recess due to insufficient Democratic support or continued disputes over ethics and enforcement provisions, regulation-sensitive assets such as Coinbase, Circle, DeFi projects, and many altcoins could face renewed pressure.
Some analysts argue that if the CLARITY Act stalls, investors may rotate back toward Bitcoin and financially strong crypto infrastructure companies. Bitcoin remains the digital asset least dependent on regulatory changes, with its long-term price trajectory continuing to be driven primarily by global liquidity conditions and broader macroeconomic trends.
Ultimately, the market’s key question is whether investors buying Bitcoin on legislative headlines are responding to a genuine Bitcoin catalyst, or simply using the asset as the most liquid way to gain exposure to regulatory developments that may benefit Coinbase, Circle, Ethereum, and Solana far more directly.
