Key Insights:
- JPMorgan puts the US crypto bill at the center of its outlook for digital assets.
- Lawmakers disagree on stablecoin rewards, which stalls broader market rules.
- In October 2024, Bitcoin reached its highest point at $126,000, but it is currently trading at a lower level.
The US Crypto Bill has been the key variable shaping the second-half outlook for digital assets. JPMorgan analysts say regulatory clarity, not price momentum, will determine whether institutional investors step in.
Bitcoin recently traded below $70,000 after peaking near $126,000 in October 2024. That rally faded as speculative flows cooled.
According to Bloomberg, JPMorgan views the US Crypto Bill as the missing structural piece. If passed by midyear, it could replace years of enforcement-driven oversight with defined rules. For large asset managers, compliance risk remains the main barrier. Clear law would quickly change that calculation.
Meanwhile, Spot Bitcoin ETFs attracted billions within months. Analysts believe the same dynamic could play out with broader market reform tied to the US Crypto Bill.
Senate Gridlock Slows US Crypto Bill Progress
The House approved the Clarity Act, but Senate negotiations remain stalled. Lawmakers disagree over stablecoin reward mechanisms. The debate centers on whether trading platforms can offer incentives to hold stablecoins.
Banks claim that this kind of incentive might increase the outflow of deposits. Cryptocurrency companies argue that restrictions would favor incumbency to the detriment of companies. This conflict has delayed the ultimate adoption of the US Crypto Bill platform. Meetings between exchange executives, banking groups, and White House officials continue.
The Genesis Act, signed in July, established a federal stablecoin structure. However, it left gaps around yield and platform incentives. Those unfinished problems now complicate greater market reform. Coinbase CEO Brian Armstrong withdrew support for one draft in January, prompting renewed talks. He later signaled progress, though no agreement has emerged.
There is another way of uncertainty through political divisions. Several Democratic senators have failed to support them until there is a compromise. Prediction markets indicate a changing probability that the US Crypto Bill will be passed this year. The probability of passing this year recently climbed again after a sharp drop from around 90% to nearly 44%.
Why the US Crypto Bill Matters for Institutions?
JPMorgan’s thesis remains conditional. Without the passage of the US Crypto Bill, regulatory ambiguity will persist. The pensions and endowment funds cannot be spent in a meaningless manner without clarity in compliance. They are discouraged by legal uncertainty rather than volatility.
If enacted, the US Crypto Bill would formalize market structure rules. It would define oversight responsibilities and compliance standards. Analysts say that the shift could end crypto regulation by enforcement. Market dealers and depository banks would receive better operating definitions.
Bitcoin has implications that go beyond Bitcoin. The tokenization of real-world assets might be hastened by adherence to set rules. Custody services will increase as the compliance structure stabilizes. Legislation support in institutional desks is frequent before scaling operations.
Market action reflects this wait-and-see stance. The total crypto market cap recently rebounded to $2.24 trillion, up $32 billion. Dollar softness supported the bounce. Bitcoin reclaimed $65,000, while Ethereum approached $1,860. XRP also recovered toward $1.38.
Yet analysts caution that consolidation can persist despite positive headlines. Bitwise CIO Matt Hougan noted that bottoms form when interest fades, not when optimism peaks. Price stabilization alone does not confirm a structural shift. Policy follow-through often determines durability.
JPMorgan hardly points out speculative catalysts without actual catalysts. The importance that institutions place on the Crypto Bill in the US indicates the importance that institutions place on regulation. If legislators can cross the stablecoin divide, it might not take long to shift sentiment.