Crypto Traders Were Hoping for Help From Washington. They Might Not Get It Soon.

Crypto Traders Were Hoping for Help From Washington. They Might Not Get It Soon. By Crystal Kim Full Bio Crystal Kim is a New York-based markets and investing reporter with more than 10 years of experience. Prior to joining Investopedia, she wrote for Barron's, Bloomberg, and Axios. Learn about our editorial policies Published February 23, 2026 02:19 PM EST Delays in the passage of a key crypto bill may be restraining bitcoin prices. Getty Images Close Key Takeaways The probability of the Clarity Act being signed into law this year fell below 50% after rising above 80% last week, per a Polymarket event contract.Crypto leaders have recently said that a compromise between banks and the crypto industry would be reached before an informal deadline set by the White House. Bitcoin is in legislative No Man's Land. The passage of the Clarity Act, which creates a framework for how to treat crypto tokens and firms up jurisdictional lines of regulatory authority, is being held up by some crypto experts as a catalyst that could drive the coin market out of a rut. Excitement over that possibility, however, seems to be fading. A Polymarket event contract asking "Clarity Act signed into law in 2026?" recently fell to around 50%, slipping from above 80% late last week. The price of bitcoin, meanwhile, is now below $65,000—the lowest levels in about a year and 50% below its October peaks. Crypto-linked stocks including Strategy (MSTR) and Coinbase Global (COIN) are similarly beaten up. WHY THIS MATTERS TO YOU A possible near-term catalyst—a piece of crypto legislation—that might move bitcoin and the broader coin market out of its rut appears to be losing steam. That may disappoint some crypto investors who thought it could revive the bitcoin trade. A disagreement between big banks and the crypto industry about how stablecoin holders can be rewarded must clear for the bill to move. Time, however, is running out for a compromise before an informal deadline set by the White House. Matt Hougan, chief investment officer of Bitwise Asset Management, in an interview with Investopedia last week said the passage of the Clarity Act was the "clearest event" in the short-term that could produce a "V-shaped recovery" in crypto markets. Bitwise in its 2026 outlook report said that the legislation would boost crypto prices, especially ether and solana, because it would provide guidance on how crypto is regulated in the U.S. and that the codification of such a framework would ensure that the regulatory posture doesn't flip with every new election. Its passage, the report said, could spark a crypto bull run that would “melt faces." (That's a good thing, in crypto terms.) Related Education Stablecoins: Definition, How They Work, and Types The Clarity Act Has Stalled, Hitting Crypto Prices. What You Need to Know. Polymarket shows coin-flip odds of the Clarity Act passing this year. Kalshi's are a bit better depending on the timeframe: The probability of passage before 2027 is around 70% on that platform; before June is at 60%, and before May is at 44%. Stablecoins aim to stay pegged to fiat currency like the dollar. Some banks want to prohibit crypto firms from giving users rewards for holding them due to concerns about competition for savings accounts. At least one major crypto player opposed that effort and stepped away from a Senate draft last month. Following that upset, the White House set an informal March 1 deadline for a deal. Patrick Witt, the executive director of the President's Council of Advisors for Digital Assets at the White House, said talks on Thursday took a "a big step forward," in a social media post last week. "Provided we continue to have good faith engagement from both sides on this issue, I fully expect we will meet our deadline," he said. Brian Armstrong, chief of Coinbase, was also positive on bill movement. In an interview with CNBC last week, he said there was a "small list of remaining open items" and that "if a compromise can be found" a bill would reach President Trump's desk within months. Treasury Secretary Scott Bessent says he is a "champion" of small banks. "We will continue to work to make sure that there is no deposit volatility associated with this," he said before a House committee earlier this month. Do you have a news tip for Investopedia reporters? Please email us at [email protected] Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Polymarket. "Clarity Act signed into law in 2026?" Bitwise. "The Year Ahead: 10 Crypto Predictions for 2026." Kalshi. "Will crypto market structure legislation become law?" X. "@EleanorTerrett, 7:58 p.m., February 10, 2026." X. "@patrickjwitt, 10:22 a.m., February 20, 2026." CNBC Television. "Full interview with Coinbase CEO Brian Armstrong and U.S. Senator Bernie Moreno." Associated Press. "LIVE: Scott Bessent appears before the House Committee on Financial Services." Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Read more News Cryptocurrency News Partner Links Take the Next Step to Invest Advertiser Disclosure × The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.