CLARITY Act Could Influence Bitcoin Valuations Amid Regulatory Shifts and Institutional Interest

Key Points

1. The CLARITY Act, passed in the US House, creates a bifurcation between the SEC and CFTC, introducing a new valuation framework for cryptocurrencies.

2. Large-cap tokens like Bitcoin and Ethereum are expected to benefit from a liquidity premium, similar to the 'on-the-run/off-the-run' pricing model in bond markets.

3. Complementary legislation like the GENIUS Act provides a federal framework for stablecoin issuance and digital asset oversight, reducing regulatory uncertainty.

4. The Act may lead to a tiered crypto market where 'blue-chip' digital assets dominate, enhancing market depth and liquidity for compliant assets.

5. Crypto equities such as Coinbase and Galaxy Digital Holdings have shown notable gains, reflecting investor optimism amid regulatory developments.