CLARITY Act May Unlock 95% of Institutional Capital Still Outside Crypto: Ric Edelman

Digital Assets Council of Financial Professionals founder Ric Edelman believes the CLARITY Act may pave the way for institutional capital to invest in the crypto market. He expects 95% of instructions outside crypto could start investing in Bitcoin and digital assets if the U.S. crypto bill is approved.

Ric Edelman Shares Insight On Current Market Trend

In spite of the lackluster market sentiment and continued regulatory uncertainty, institutional interest in digital assets is still present, according to Edelman. He cited the increasing price difference between cryptocurrencies and industry uptake.

“Crypto prices are not reflecting what’s happening in the world of crypto,” Edelman said.

Further, major Wall Street firms are still ramping up their blockchain and tokenization initiatives, he added. For context, BlackRock, JPMorgan, Morgan Stanley, Franklin Templeton, State Street, Invesco and Fidelity are among them.

Institutional demand is also on the rise, Edelman said. He even predicted, “95% of the institutions that don’t own crypto say they’re going to allocate this year for the first time,” per a CoinDesk interview.

He added that “three-quarters of those who are already allocated say that they’re going to increase their allocations.”

Investors are still short-term oriented despite that trend. Edelman pointed to Bitcoin ETF outflows, uncertainty in crypto legislation and the political opposition from lawmakers like Bernie Sanders and Elizabeth Warren.

CLARITY Act Could Inject Massive Institutional Capital Into Crypto

For this surge in institutional capital, the biggest catalyst in the industry is the CLARITY Act, he said. “A lot of folks are looking at the CLARITY Act as the key pivot point,” Edelman stated. The bill would bring to the traditional financial companies much-needed regulatory certainty, he said.

“If this gets passed into law, that will largely be seen by many as the bottom,” he stated. Edelman added, “This is all we needed to get the institutional marketplace, TradFi, fully engaged because the rules of the road will be clear.”

Edelman further noted, “if there are delays in these, then it could impact the market sentiment.” He added, “If the bill fails or is delayed, you’re going to see a negative reaction in the short term as people are disappointed in the loss of momentum.”

It’s not clear when the bill will be signed into law. However, Edelman spotlighted that White House crypto advisor Patrick Witt had hinted that the bill would pass by July 4.

In addition to regulations, Edelman stated that the institutions are still being cautious as many decision makers are worried about risk in their careers rather than the longer-term opportunities.

Nevertheless, he is hopeful for the future of cryptocurrencies. He forecasted Bitcoin price could surge to “$150,000 or better.” Still, he noted that regulatory advancement will have a large impact on market performance this year.

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