On July 16, 2026, with only about 20 working days left until the U.S. Senate’s August 7 summer recess, Gate’s prediction market data shows the probability that the Digital Asset Market Clarity Act (CLARITY Act) will be officially signed into law in 2026 is only 35%—down from as high as 82% in February 2026.
Over five months, nearly 50 percentage points of probability have evaporated. This is not the impact of a single event, but the result of a layered combination of institutional obstacles, political bargaining, and mounting time pressure. The pricing changes in prediction markets are, in essence, continuous reappraisals of uncertainty.
What problem is the CLARITY Act actually meant to solve
The CLARITY Act’s core objective is to establish a complete regulatory framework for digital assets at the federal level. For years, the biggest difficulty facing the U.S. crypto industry has not been regulation that is too strict or too loose—it has been that “nobody knows who regulates it.”
The U.S. Securities and Exchange Commission (SEC) uses the Howey test to determine whether tokens constitute securities, while the U.S. Commodity Futures Trading Commission (CFTC) treats Bitcoin, Ethereum, and others as commodities. But at the level of statutory law, there is no unified, written definition of a “digital commodity.” The same type of asset may be reclassified at different stages, making it difficult for exchanges, brokers, and issuers to design a predictable compliance framework.
The bill’s core mechanism builds a regulatory bridge between the SEC and the CFTC: “ancillary assets” that depend on the efforts of the sponsor are assigned to SEC oversight, requiring issuers to disclose information such as audited financial statements and tokenomics. Once token control is dispersed, it then switches to “digital commodities,” with trading venues and intermediaries regulated by the CFTC. In addition, the bill also creates a safe harbor for non-custodial software developers (Section 604), clarifying that developers who merely publish code, provide self-custody tools, or maintain blockchain infrastructure do not constitute “fund transferors.”
The bill passed the U.S. House of Representatives in July 2025 by a vote of 294-134, and on May 14, 2026 it was approved by the Senate Banking Committee 15-9 with bipartisan support. However, committee approval is not the finish line—the real test is the full Senate vote.
Why the prediction market probability fell from 82% to 35%: what’s driving it
In February 2026, market expectations for CLARITY Act passage within the year were at a high point; the 82% probability reflected a relatively smooth legislative process and early bipartisan consensus. Since then, the probability has continued to slide, showing a stepwise decline.
In mid-May, Polymarket’s probability was about 74%-75%. In its third-quarter outlook report, Bitwise said prediction markets have cut probabilities down to 40%. Galaxy Research, meanwhile, reduced its expectations from 75% in May to 60%, and then to 50%.
When it entered July, the decline accelerated. On July 13, Polymarket’s probability briefly hit a low of 24%. As of July 16, the CLARITY Act passage probability stands at 35% for now.
The steep downward slope of the probability curve reflects the market’s sustained pessimistic adjustments to three variables: the standoff over ethical disputes, the exhaustion of legislative time, and uncontrollable outcomes in bipartisan vote counts.
Why the Senate needs 60 votes instead of a simple majority to clear
In the U.S. Senate, most bills must overcome “filibuster” procedure. To end debate and move toward a vote, at least 60 votes in support are required—this is known as the “cloture” threshold.
The Republicans currently hold 53 seats in the Senate. That means that even if all Republican senators vote in favor, the bill would still require at least 7 Democratic senators to cross party lines to reach the 60-vote threshold.
In the May 14 vote in the Senate Banking Committee, Democratic senators Ruben Gallego and Angela Alsobrooks voted in favor along with all 13 Republican committee members. But to date, the final support from those two Democrats for the full Senate remains conditional. Democratic senators who publicly oppose the current bill have begun to emerge—Chris Murphy, Chris Van Hollen, and Jeff Merkley have all expressed opposition.
Within the 53-seat Republican caucus, there has also been pressure from a reduced headcount in recent times—Senator Lindsey Graham, who supports the bill, died recently, and Mitch McConnell has been absent since mid-June. This further amplifies pressure for Republicans to secure Democratic votes.
Why ethical disputes have become the biggest “roadblock”
Among the many obstacles facing the CLARITY Act, the ethical provisions are currently the most difficult problem.
Democrats are demanding the addition of a restriction clause—barring senior government officials, including the President, from maintaining business relationships with the crypto industry. The backdrop is: President Trump’s latest financial disclosure shows that in 2025, more than $1.4 billion of his income came from crypto-related business, including World Liberty Financial and licensing revenue tied to the TRUMP meme token.
Two Democratic senators who voted for the Banking Committee version have already explicitly warned that if the ethical provisions are not handled properly, they will not support the final bill. The merged text has not yet settled the clause. Options under discussion include allowing state attorneys general to bring lawsuits over ethical violations.
On Thursday, July 16, Trump will meet at the White House with senators Bernie Moreno, Cynthia Lummis, and White House senior crypto adviser Patrick Witt to specifically discuss the CLARITY Act’s ethical provisions. Kristin Smith, president of the Solana Policy Research Institute, said the meeting is “crucial” to passage of the bill. Crypto industry sources said progress depends on the outcome of Thursday’s meeting—“Trump’s personal attendance is a big deal.”
At its core, the ethical dispute is about dragging a market-structure piece of legislation into a political vortex tied to the President’s personal interests. This goes beyond policy debate and becomes a central variable in vote politics.
Why the time window is closing rapidly
From the Senate’s return on July 13 to the start of the August 7 summer recess, there are only about 20 working days left, at most. This is the CLARITY Act’s last realistic chance to pass in 2026.
Once Congress enters recess, attention will shift to midterm election campaigning in November, and opportunities for major financial legislation will drop sharply. Policy analysts believe that if the August window is missed, meaningful federal legislation for crypto may be delayed until 2030 or later.
In addition, the time pressure overlaps with another piece of crypto legislation—the GENIUS Act (stablecoin law)—whose rulemaking deadline falls on July 18, 2026. The GENIUS Act was signed on July 18, 2025, and its rulemaking cutoff date is July 18, 2026. The two bills are effectively in competition for congressional scheduling.
Senate Majority Leader John Thune hopes to have the bill submitted for a full Senate vote before the August recess; an updated text is expected to be released this week. Senator Lummis said in an interview that the new version would be introduced within the next few days and is expected to enter the Senate’s voting agenda next week. However, it remains unclear when the revised bill draft will be published.
Why data differs across different prediction markets
As of July 16, multiple prediction platforms show significant differences in pricing for the probability that the CLARITY Act will pass in 2026:
- Gate prediction market: 35%
- Kalshi: 36% (passed law by 2026), 62% (passed by end of 2027)
- Polymarket: 39%
These differences stem from each platform’s different definition of “passing,” differences in user base and liquidity, and different risk pricing for the same set of uncertainty factors. On Kalshi, a prediction market worth $3 million simultaneously gives a 79% probability for “pass before a vote before the August recess,” indicating that the market still believes the bill is likely to secure a Senate vote. But it also suggests there are enough variables between a vote and final signing into law for the probability to be pushed well beyond a simple halfway cut.
The gap in probability itself is also information: the market is pricing a split between “procedural advancement” and “substantive passage,” which precisely reflects the core contradiction of the CLARITY Act right now—it is getting closer to the Senate floor, but farther from a White House signature.
What are the potential implications if the bill succeeds or fails
If the CLARITY Act is enacted, it would represent one of the biggest regulatory reforms in U.S. crypto history. It would establish a clearer division of power between the SEC and the CFTC, reducing long-standing uncertainty around the classification and regulation of digital assets. This clarity could encourage more institutions to participate and improve investor confidence. Bitwise describes the CLARITY Act as a possible key inflection point for the market, arguing that passage could mean the bottom of the current market cycle and strengthen expectations for a mid-cycle recovery.
However, passage of the bill would not immediately resolve all regulatory challenges. The two agencies would still need to develop detailed implementation rules, conduct public consultations, and address numerous legal issues surrounding DeFi, stablecoins, and emerging blockchain technologies. Comprehensive regulatory certainty may still take years to fully materialize even after the bill becomes law.
If the bill fails or is delayed, regulatory uncertainty would continue beyond 2026. The U.S. crypto industry would keep operating under inconsistent regulatory frameworks, forcing companies to continue dealing with overlapping regulatory enforcement actions and legal uncertainty. Bitwise also warned that if the bill is rejected or delayed, it could trigger short-term market volatility.
FAQ
Q: What is the full name of the CLARITY Act?
The Digital Asset Market Clarity Act, No. H.R. 3633.
Q: What is the core goal of the CLARITY Act?
To establish a complete regulatory framework for digital assets at the federal level, clarify the regulatory division of responsibilities for digital assets between the SEC and the CFTC, and provide the crypto industry with a predictable compliance path.
Q: What stage is the bill at in Congress right now?
It has passed the House of Representatives (July 2025, 294-134) and the Senate Banking Committee (May 14, 2026, 15-9), and is awaiting a full Senate vote.
Q: How many votes are needed in the Senate for the bill to pass?
60 votes are needed to overcome the filibuster procedure. Republicans currently have 53 seats, so at least 7 Democratic senators must provide bipartisan support.
Q: What is the biggest obstacle to passage of the bill?
Ethical provisions—Democrats are seeking to restrict senior government officials, including the President, from maintaining business relationships with the crypto industry, and President Trump’s 2025 income includes more than $1.4 billion from crypto-related business.
Q: How much time is left for the bill?
From the Senate’s return on July 13 to the start of the August 7 summer recess: about 20 working days. This is the final window for passage in 2026.
Q: What happens if the bill doesn’t pass?
Regulatory uncertainty would persist, and meaningful federal crypto legislation could be delayed until 2030 or later. The U.S. crypto industry would continue facing inconsistent regulatory frameworks and overlapping enforcement by regulators.
Q: What would passage of the bill mean for the market?
It could provide a clearer regulatory framework for digital assets, driving greater institutional participation and boosting investor confidence. Bitwise believes passage could mean the bottom of the current market cycle.
