Crypto markets are massively underpricing Clarity Act passing – Hashdex warns

A notable development has hit the crypto markets. The Senate Banking Committee meets in executive session later today, May 14, to consider the CLARITY Act, a bill that already cleared the House 294-134 in July 2025 and needs at least 7 Democratic votes to advance in the full Senate. Hashdex CIO Samir Kerbage reads the current crypto price action as confirmation that the market is pricing the odds of a committee vote, leaving the capital flow scenario of a signed bill entirely out of current valuations. Kerbage told : “If the CLARITY Act is signed into law this won't just be a compliance milestone, it will be a market activation event that should lead to significant capital inflows, product development, and broad institutional acceptance.

” Related Reading CLARITY Act faces 100+ amendments as bankers send 8,000 demand letters against stablecoin rewards Crypto advocates mobilized 300,000 emails to counter a banking campaign aimed at stripping stablecoin yield provisions from the CLARITY Act. May 13, 2026 Oluwapelumi Adejumo He added that Hashdex is optimistic that the bill will reach President Donald Trump's desk this summer. The CLARITY Act faces six steps from its July 2025 House passage to the president's desk, with the Senate requiring at least seven Democratic votes.

Market Dynamics

What the Clarity Act establishes CLARITY covers stablecoin rewards, anti-money-laundering rules, SEC fundraising exemptions, DeFi treatment, and tokenization. The stablecoin provision is the most contentious, as the bill bans rewards on idle stablecoin balances that resemble bank deposits while permitting transaction-based rewards and requires the SEC, CFTC, and Treasury to issue joint rules. Banks have pushed back against deposit flight risk, while crypto firms argue that restricting third-party rewards is anti-competitive.

The bill would bring digital commodity exchanges, brokers, and dealers under Bank Secrecy Act treatment as financial institutions, adding AML, customer identification, and due diligence obligations. For institutions sitting on the sidelines, that framework is a prerequisite, as it gives compliance teams a rulebook to defend internally and investment committees a structure they can approve. Kerbage said: “The CLARITY Act is particularly important for institutional investors.

These investors have fiduciary responsibilities and investment policies that require a far greater level of regulatory clarity than individual investors. ” Institutions need policy clarity, investment committee approval, product wrappers, and fiduciary justification before they can allocate at scale. If signed, the CLARITY Act provides the policy layer that unlocks the rest of that chain.

Market Impact

Kerbage expects the bulk of that institutional capital to flow through ETFs and index-based crypto products, giving demand a durable, reportable structure. Farside Investors data shows that US-traded Ethereum ETFs have accumulated approximately $12 billion in cumulative net flows since launch, and Solana ETFs have surpassed $1 billion. Both are well below the Bitcoin ETF scale, accumulating in a market where CLARITY would, for the first time, establish the regulatory status of their underlying assets.

The Bitcoin ETF comparison Kerbage's benchmark for CLARITY's potential is the SEC's January 2024 approval of spot Bitcoin ETF listings, which converted latent demand into packaged, committee-approved flows at a far larger scale than pre-approval consensus had projected. He argued: “For Bitcoin alone, that regulatory action led to cumulative flows crossing $70 billion in just two years. If digital asset market structure legislation is signed into law, we expect a similar trajectory for crypto assets beyond Bitcoin, particularly the smart contract platforms providing the underlying infrastructure for stablecoins and tokenization initiatives.

” CLARITY would give the broader crypto asset class a definitional framework, determining when tokens are securities, commodities, or otherwise, and the products issuers need to build and institutions need to buy. Bitcoin ETFs have drawn roughly $70 billion in cumulative flows since launch, dwarfing Ethereum ETFs at $12 billion and Solana ETFs at $1 billion. Kerbage points to new product creation as the mechanism through which capital enters the market once legislation clears, building through a pipeline of ETFs and wrappers that institutions can use.

Crypto markets are watching this development closely as investors weigh its potential impact on prices.