JPMorgan Projects Bullish Crypto Market in H2 Following CLARITY Act Approval

Banking giant JPMorgan has expressed confidence in the crypto market returning to its previous highs. The bank said bullish sentiment could return to the market once the CLARITY Act is approved by legislators.

JPMorgan Forecasts Strong Second Half for Crypto Market

According to Bloomberg, the bank indicated that the market could get a boost in the second half of the year if lawmakers in the US approve the market legislation by midyear, despite the sour market sentiment.

“If passed it will reshape market structure by providing regulatory clarity, ending ‘regulation by enforcement,’ promoting tokenization, and facilitating greater institutional participation,” the bank said.

This JPMorgan projection is in line with the expectations of top executives regarding when this could be approved. For example, Coinbase’s CEO Brian Armstrong stated that there was great progress in negotiations regarding the crypto market bill. He then stated that April was a potential timeline for this to be approved. The Ripple CEO, Brad Garlinghouse, shares this same view.

The CLARITY Act, which was approved in the House, is part of the overall efforts in Congress to create an overall framework for the regulation of digital assets. The bill is progressing at a slower pace in the Senate because of disagreements over how to regulate the market as a whole.

A big issue is whether crypto trading platforms should have the authority to reward users for holding stablecoins in their portfolios. Banks have expressed that if they allow the platforms to pay users interest on stablecoin holdings, they could lose deposits.

Since then, Coinbase, crypto businesses, and the banking industry have had several meetings at the White House on the crypto market bill  to try to come to an agreement.

Where Does the CLARITY Act Stand Now?

As of press time, the yield negotiations in the crypto bill have yet to be resolved despite the progress reported. Sources from both camps indicated that the recent White House proposal has yet to yield a compromise.

The issue at hand still seems to revolve around the activity-based reward system. It seems that there are no longer any considerations for yield from idle stablecoin holdings, as suggested by recent reports. However, there seems to be a divide in terms of usage-based incentives.

It is interesting to note that the U.S. Democrat senators held a meeting to discuss the crypto market bill as they await resolution from the players in the market. It is important to note that these senators have been withholding support for the progress of this bill.

To add, odds on Polymarket for the CLARITY Act passing this year have jumped back up again. This was after it previously fell all the way from 90% to 44%.