CLARITY Act may end Bitcoin regulatory uncertainty by classifying it as a digital commodity in the U.S.

The CLARITY Act, passed by the U.S. House and pending Senate approval, aims to classify Bitcoin and Ethereum as digital commodities under CFTC oversight, potentially resolving years of regulatory uncertainty caused by the Howey test. Senate disputes over stablecoin yield limits and DeFi liability continue to delay the bill, reflecting broader tensions between traditional finance and crypto markets. Despite recent Bitcoin price rebounds, weak U.S. spot demand and regulatory uncertainty have kept institutional investors cautious. If passed, the Act could improve custody rules and remove barriers for institutional spot market participation, marking a significant shift toward more stable, institutional-driven Bitcoin demand.