If Congress does not pass market structure legislation this year, the US crypto market would not return to the intense enforcement environment of 2022 and 2023, but would remain structurally constrained at a time when global adoption and institutional interest are accelerating, Wall Street broker Benchmark said.
“The absence of legislation would cause a structural risk premium to persist across much of the digital asset ecosystem,” analyst Mark Palmer wrote in Monday’s report, adding that this would limit the valuation expansion of platforms exposed to the United States.
Palmer said failing to pass the legislation would delay, rather than derail, the maturation of cryptocurrencies, leaving the US market operating below its potential as investors prefer bitcoin-focused exposure, strong balance sheets and cash flow infrastructure over regulation-sensitive segments such as exchanges, decentralized finance (DeFi) and altcoins.
The bill aims to define the structure of the US crypto market by defining how digital assets can be classified as commodities or securities and clarifying oversight by the Stock Exchange (SEC) and the Commodity Futures Trading Commission (CFTC). While House approval last year shifted the debate toward details such as the performance of stablecoins and DeFi interfaces, negotiations in the Senate have been slower and more contentious, raising the risk that final approval will be delayed until next year.
Palmer said markets are already pricing in that timing risk. Without a market structure bill, exchanges would face continued pricing uncertainty, higher compliance costs and limits on expanding into higher-margin products, while monetization of stablecoins could be delayed by unresolved rules on performance and distribution.
bitcoin and bitcoin-focused treasury companies would be comparatively insulated, Palmer said, given the cryptocurrency’s established status as a commodity, with miners and energy-backed infrastructure also less exposed.
DeFi and smart contract platforms remain the most vulnerable as regulatory ambiguity continues to limit US participation, while custody and compliance providers would maintain relatively defensive positions, the report added.
Despite the delays, Palmer still sees a crypto market structure bill as more likely to pass, even if it is watered down, arguing that any version of the legislation would reduce regulatory risk and unlock broader institutional participation.
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