The Senate has targeted the January CLARITY Act markup

Traders are already positioning themselves around renewed regulatory pressure. ETH is trading near $2,965, up about 0.3% on the day and roughly 5% over the past month. Meanwhile SOL is trading around $124, up 1.4% on the day and 0.7% over the last month.

Key provisions of the CLARITY Act

Staff working on the text of the Clarity Act would put the CFTC in the lead for non-securities tokens that meet trading and decentralization tests in the current draft, which the SEC's rule would provide for tokens that rely on ongoing regulatory efforts and feature production or revenue sharing.

That division tracks how recent SEC enforcement complaints have defined designated assets, but for the first time puts the test through legislation rather than case law and rhetoric.

On DeFi, lobbyists who reviewed December's redline said the bill would treat front-end operators, order-transmitting interfaces and fee-collecting DAOs as subscribers, leaving a safe harbor open for smart contracts with immutable, fee-free upgrade keys.

Political environment and market sentiment

Prediction markets are increasingly speculating that lawmakers will disrupt this cycle. In Kalshi, contracts tied to the approval of a broad federal digital asset framework by mid-2026 are trading at materially higher odds than in early Q4, fueled by open demand that appears to have officially confirmed the launch date.

Traders will use those markets as an informal policy barometer in 2023-2025 for pressures on previous housing-based bills.

Banking committee members from both parties, including senators who have previously supported narrow market structure efforts, have told industry groups to avoid a repeat of previous cycles in which the House passed a digital assets package that died in the Senate without a committee vote.

A clean signal that gets a binary manager update paves the way for 60 votes on the floor, but workers still expect serious improvements in DeFi protection, sanctions enforcement, and crypto-native stablecoin rewards in retirement accounts.

On the July 2025 discussion bill, Senate Banking Committee Chairman Sen. Tim Scott said, “My colleagues in the House and Senate share the same goal: to provide clear rules for the road to digital assets that protect investors, encourage innovation, and keep the future of digital finance in America.”

Additionally, the CLARITY Act debate does not occur in isolation. ETH raised more than $1.3 billion in new equity flows from institutional vehicles as of the end of December, according to recent filings and fund disclosures, while Solana continues to hold high beta flows and its market cap has grown significantly from 2022 levels.

The cost of those flows is that the next Congress could provide a more workable system than continued law-enforcement.

Institutional market implications

For heavy-sized tables in ETH and SOL, this token acts as a binary policy catalyst rather than political theater.

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If the session splits on party-line votes or pushes Defin into a de facto regime, the business will be flipped: US flows will migrate offshore, regulated positions will lean toward BTC and a few blue chips, and deregulation on anything resembling revenue sharing or stock derivatives will widen again.