Will the CLARITY Act Passage Timeline Clash with the September FOMC Decision? Two Possible Paths for the Crypto Market

EX.IO Research

Since early June this year, the crypto market has remained range-bound. Taking Bitcoin as the benchmark, prices have continued to consolidate between USD 60,000 and 67,000, with external market sentiment remaining cautious. However, this nearly two-and-a-half-month standoff may face a material catalyst:

• U.S. Senate Majority Leader John Thune formally filed a motion to proceed in the early hours of Saturday (August 8) to commence official deliberation of the Digital Asset Market Clarity Act (commonly known as the CLARITY Act). The expected vote is around September 15.

• Meanwhile, the Federal Reserve’s FOMC will convene a two-day policy meeting starting September 15 (U.S. time). This marks the rare coincidence of a major digital asset regulatory bill and a critical monetary policy decision landing on the same day—markets are watching closely.

On the rates front, the U.S. unexpectedly recorded job losses in July (nonfarm payrolls fell by 23,000). According to CME FedWatch data (as of August 7, 2026), the probability of the Fed holding rates steady stands at approximately 56.1%—nearly double the level of a month earlier—thereby reducing the odds of further pressure on the crypto market.

EX.IO Research Institute’s core assessment is as follows:

• Taking vote arithmetic and the interest-rate environment together, securing 60 votes in the Senate will be extremely difficult for Republicans. The ethics-clause deadlock remains unresolved, Democrats lack incentives to cross the aisle, and some Republicans remain wavering. The odds of the motion clearing on September 15 are low.

• Assuming the Fed does not hike, once the motion fails, the difficulty of completing legislation within President Trump’s term rises sharply.

• Therefore, under this base-case scenario—and absent other idiosyncratic market shocks (such as Middle East developments or sharp moves in gold/silver)—the crypto market is expected to remain in a narrow consolidation range in the near term. This is scenario analysis, not a price prediction.

Over the medium to long term, regardless of the outcome of any single event, the structural trends of institutionalizing digital asset regulation and expanding on-chain applications remain intact. Current price oscillations in major crypto assets primarily reflect the tug-of-war between policy and liquidity expectations rather than a deterioration in industry fundamentals.

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EX.IO Research Institute Views the Market as Influenced by Four Overlapping Factors: 

1. Dim Prospects for CLARITY Act Passage 

• The bill aims to delineate the respective jurisdictions of the SEC and the CFTC over digital assets. It passed the House by a large majority in July 2025, but a Senate cloture motion requires a 60-vote threshold.

• Republicans hold only 53 seats, meaning that even with unanimous Republican support, at least 7 Democratic votes are still required. Any Republican defections would raise the bar further.

Primary Obstacle: The Ethics Clause Dispute 

• President Trump’s 2025 financial disclosures show crypto-related income exceeding USD 1.4 billion. The White House-backed version only prohibits officials from issuing “new” digital assets while in office and includes a January 2029 sunset clause;

• Democrats demand mandatory divestiture of crypto assets by the President and senior officials.

• A bipartisan Tillis–Gallego compromise has been submitted to the White House but has yet to receive endorsement.

• Vote arithmetic is equally unfavorable: certain Republican senators remain hesitant due to community-bank concerns over stablecoin yield provisions, leaving intra-party support less than solid.

• Betting markets have turned more pessimistic: odds on Polymarket for the bill being “signed into law in 2026” have fallen from a February peak of 82% to 14–17% as of August 7.

2. Unusual Variables in the Federal Reserve’s Policy Path 

• Under normal circumstances, a rate hike tightens liquidity and raises the cost of capital, exerting downward pressure on risk assets such as Bitcoin.

• As Bitcoin’s correlation with traditional financial markets (equities and spot ETFs) has tightened, macro rate expectations have become a core driver of price action.

• Kevin Warsh assumed the Fed Chairmanship in May and has tilted policy more hawkish. The July 29 FOMC held rates at 3.50%–3.75% by a 9–3 vote, with three regional Fed presidents dissenting in favor of a hike—the most divided meeting since 2016.

• However, reports on August 4–5 indicated that the U.S. and Qatar were pushing to restore a ceasefire and reopen the Strait of Hormuz. Should a ceasefire materialize and oil prices retreat, overall U.S. rate-hike pressure could ease, offering the crypto market a temporary respite on funding costs.

3. Capital Flows: Soft Then Stabilizing; Long-Term Capital Has Not Exited

• U.S. spot Bitcoin ETFs recorded only about USD 172 million in net inflows in July—the weakest positive-inflow month since listing. Yet August has seen six consecutive days of net inflows, totaling approximately USD 755 million (TFTC, August 6, 2026), indicating that long-term capital has not left the market.

Corporate holdings: 

• Strategy (MSTR) holds 843,775 Bitcoin at an average cost of approximately USD 75,476, implying an unrealized loss of roughly USD 9 billion. It sold 3,588 BTC in July (its second reduction this year) to cover preferred-stock dividends and interest expenses.

• Corporate treasury allocation to Ether is rising; reports indicate BitMine holds approximately 5.74 million ETH, representing about 4.8% of supply.

• Stablecoin market capitalization stands at roughly USD 305–315 billion; on-chain real-world assets (RWA) are around USD 31–36 billion—approximately four times the level at the start of 2025—reflecting a gradual shift of capital from speculation toward application.

4. Security Incidents Weighing on Market Sentiment 

• Hardware wallet Coldcard has suffered successive vulnerabilities, with four waves of theft totaling approximately 1,816 Bitcoin (worth about USD 116 million).

• Year-to-date hacker losses have exceeded USD 1.2 billion (TRM Labs, August 6, 2026), bringing asset-custody security back into sharp focus.

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Two Scenarios, Two Futures 

Scenario 1 (Lower Probability): Motion Succeeds 

• Note: Passage of the cloture motion merely “gets the bill on the floor”—it is not final enactment. Further amendment debate, a second cloture vote, and bicameral conference would still be required.

• Markets, however, price expectations. Once 60 votes are secured, the United States would be on track to establish its first permanent statutory regulatory framework for digital assets, and institutional capital inflows could accelerate markedly.

Scenario 2 (Base Case): Motion Fails 

• According to reports, the joint interpretive guidance issued by the SEC and CFTC in March 2026 would continue to serve as an interim framework. However, administrative guidance can be overturned by a subsequent administration, making it difficult for institutions to make long-term commitments on that basis.

• The legislative window is also narrowing: the realistic remaining opportunity may be limited to the December “lame-duck” session. Failure there would push the process into 2027, by which time midterm elections will have reshaped the congressional landscape and bipartisan differences on the ethics clause will be even harder to bridge.

• Should the September vote fail, completing legislation within President Trump’s term becomes highly difficult.

• We believe that even if the bill is delayed, the market impact would be short-term in nature and would not alter the medium- to long-term structural trajectory.

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Near-Term Price Outlook 

EX.IO Research Institute believes that, under the base-case assumption of the Fed holding rates steady and in the absence of other idiosyncratic shocks (Middle East developments, sharp moves in gold/silver, etc.):

• The market is expected to remain in a narrow consolidation range in the near term.

• Taking Bitcoin as an example, prices have recently hovered around the USD 65,000 level. The higher probability is that the market consolidates between USD 60,000 and 67,000 in the short term—this is scenario analysis, not a price forecast.

What could break this range are outcomes outside current expectations:

• If the September 15 vote unexpectedly succeeds, or if subsequent nonfarm payrolls and CPI data weaken meaningfully and raise expectations of a policy pivot toward easing, the probability of an upside breakout of the range would rise substantially;

• Conversely, if inflation reaccelerates and revives rate-hike expectations, or if geopolitical risks in the Middle East escalate again, the lower bound of the range would come under renewed pressure.

As a Hong Kong-licensed Virtual Asset Trading Platform (VATP), EX.IO provides regulated trading and custody services under the local regulatory framework. The EX.IO Research Institute, part of the same group, will continue to monitor the September 15 Senate vote and the FOMC decision, and will provide timely follow-up analysis for readers.

This Institute does not publish specific price targets. Investors are advised to rely on scenario analysis rather than single-point forecasts. 

Conflict of Interest Disclosure: EX.IO Group operates a licensed virtual asset trading platform. The Group and related parties may directly or indirectly participate in market activities involving assets mentioned in this report. Views expressed herein represent those of the EX.IO Research Institute only.

Disclaimer: This article is for general informational and educational purposes only and does not constitute investment advice, an offer, or a solicitation. Data cited are drawn from publicly available sources and dates noted in the text. EX.IO Research Institute strives for accuracy but does not guarantee completeness or timeliness. Virtual asset prices are highly volatile; past performance is not indicative of future returns. Investors may lose their entire principal. Please assess your own risk tolerance and consult independent professional advice before investing.