Galaxy Digital Lowers CLARITY Act Passage Odds
Galaxy Digital has reduced its estimate for the likelihood of the CLARITY Act becoming law in 2026 from 75% to 60%, reflecting growing concerns that the U.S. Senate may be running out of time to pass the crypto market structure legislation.
Why Galaxy Cut Its Forecast
According to Alex Thorn:
- In May, Galaxy increased its passage odds to 75% after the bill advanced through the Senate Banking Committee.
- The firm has now lowered that estimate to 60% because the legislative calendar has become increasingly compressed.
- Thorn believes meaningful Senate action must occur in July before lawmakers leave for the August recess.
The concern is procedural rather than ideological. Even if sufficient support exists, Congress may simply run out of available floor time.
Senate Timeline Is Becoming Critical
The CLARITY Act still faces several major hurdles:
- Senate floor debate.
- Consideration of amendments.
- Reconciliation between competing Senate committee versions.
- Final approval by both chambers of Congress.
According to Thorn, Senate Majority Leader John Thune would likely need to schedule floor consideration during July for the bill to have a realistic chance of passage before the August recess.
Once lawmakers shift focus toward midterm election campaigns, passing major crypto legislation becomes significantly more difficult.
Key Issues Still Unresolved
Galaxy highlighted two major areas of disagreement:
- Ethics provisions.
- Anti-money laundering and illicit-finance safeguards.
These issues remain particularly sensitive because they affect support from moderate lawmakers and senators who remain skeptical of the crypto industry.
Meanwhile, Cynthia Lummis continues to advocate for the legislation and has stated that discussions are ongoing to resolve outstanding concerns.
Other Analysts Are Also Becoming More Cautious
Galaxy is not alone in lowering expectations:
- JPMorgan Chase recently estimated the probability of passage at below 50%.
- Matt Hougan noted that some Washington observers place the odds between 5% and 30%.
While these estimates vary widely, they all point to the same challenge: legislative timing.
Why the CLARITY Act Matters
The CLARITY Act is viewed as one of the most important crypto regulatory proposals currently under consideration in the United States.
Supporters argue it would:
- Define regulatory responsibilities among federal agencies.
- Create clearer rules for digital asset businesses.
- Reduce uncertainty for institutional investors.
- Encourage broader participation in crypto markets.
Many industry participants see regulatory clarity as a prerequisite for larger institutional adoption.
Outlook
The next several weeks could determine the bill’s fate.
Bullish scenario:
- Senate leadership schedules a July floor vote.
- Lawmakers resolve ethics and illicit-finance provisions.
- The bill advances before the August recess.
Bearish scenario:
- Floor time is delayed.
- Political attention shifts toward elections.
- The legislation is pushed into a much more uncertain 2027 timetable.
For now, Galaxy still believes the CLARITY Act is more likely than not to pass this year, but the margin of confidence has narrowed considerably as the Senate calendar becomes the dominant risk factor.
