In brief
The Digital Asset Market Clarity Act (H.R.3633) has a 28.5% chance of being signed into law by the end of 2026, according to Polymarket traders. The bill passed the House in July 2025 but remains stalled in the Senate over an ethics provision. With the August recess beginning and a crowded legislative calendar, the odds of enactment are low.
Introduction
The CLARITY Act (H.R.3633) is the most ambitious attempt to create a statutory framework for digital asset markets in the United States. It would assign oversight of digital commodities to the CFTC and clarify which assets fall outside SEC jurisdiction. The bill passed the House overwhelmingly in 2025 but has languished in the Senate for over a year. As of August 1, 2026, with the Senate about to enter its August state work period, the path to enactment is narrowing.
What to know
The CLARITY Act, formally the Digital Asset Market Clarity Act of 2025, was introduced in the House and passed on July 17, 2025, by a vote of 294-134 (Source 6). It then moved to the Senate, where the Banking Committee advanced it in a bipartisan 15-9 vote on May 14, 2026 (Source 13). However, floor action stalled due to disagreements over ethics provisions that would restrict lawmakers and their staff from trading or issuing digital assets. Democrats demanded stronger rules, while Republicans favored narrower restrictions (Source 8).
On July 22, 2026, an updated Republican draft with ethics language was released, but Democrats rejected it (Source 5). Senate Majority Leader Thune conceded on July 23 that finishing the bill before the August recess was unlikely (Source 5). A July 29 report from Yahoo News confirmed that the Senate had set aside the bill ahead of its recess (Source 3). A key sticking point is a clause that could limit President Trump's crypto income, which some observers say is blocking progress (Source 10).
The practical deadline for a Senate vote before the August recess has passed. The Senate's state work period begins August 10, 2026 (Source 6). After recess, the fall schedule is crowded with appropriations and the November midterm elections, leaving only a possible lame-duck session in December for passage (Source 6).
The market numbers
Polymarket's 'Clarity Act signed into law in 2026?' market has drawn $3.64 million in volume. Current odds are heavily skewed against passage.
| Outcome | Implied Probability |
|---|---|
| Yes | 28.5% |
| No | 71.5% |
The 'Yes' probability has fallen from around 74% in May 2026, when the Senate Banking Committee advanced the bill, to 28.5% as of August 1 (Source 9). The decline accelerated after the July 22 ethics impasse and the Senate's decision to delay floor action.
The factors at play
- Ethics deadlock: The core disagreement over whether to restrict lawmakers' crypto trading remains unresolved. Democrats want broader restrictions, Republicans want narrower ones (Source 8).
- August recess: The Senate is about to leave for a month-long state work period. No floor vote can occur before September (Source 3).
- Election year politics: November 2026 midterm elections will consume much of the fall calendar. Lame-duck sessions are unpredictable and often focused on must-pass spending bills.
- Presidential stake: President Trump's reported $1.4 billion crypto holdings could be affected by the ethics clause, potentially reducing White House support for the bill as written (Source 10).
- Lame-duck window: The only realistic chance for passage is in December 2026, after the elections. However, such sessions are typically short and prioritise continuing resolutions, not complex financial legislation.
Our prediction
According to our analysis, the most likely outcome is No. Polymarket currently assigns a probability of 71.5% to this outcome, while our internal estimate is 85%. The difference stems from the following factors: the Senate's formal decision to set aside the bill before recess, the unresolved ethics dispute that shows no signs of compromise, and the limited legislative window remaining. The 28.5% 'Yes' price on Polymarket may overestimate the possibility of a last-minute breakthrough, given the political incentives against passing a controversial crypto bill in an election year.
Risks and uncertainties
- Lame-duck surprise: If the ethics dispute is resolved in the fall, the bill could be attached to a must-pass package in December.
- Executive pressure: President Trump could push for a stripped-down version without the ethics clause, which might attract Democratic support.
- Market reaction: A sharp crypto market downturn could increase urgency for regulatory clarity, giving the bill new momentum.
- Alternative vehicles: The provisions could be inserted into another bill, bypassing the stand-alone CLARITY Act.
Conclusion
The CLARITY Act's path to becoming law in 2026 is nearly closed. The Senate's ethics impasse, combined with the August recess and an election-year schedule, makes passage improbable. While a lame-duck miracle cannot be ruled out, the odds are firmly against it. Traders betting on 'No' appear to have the stronger case.
This content is for informational purposes only and does not constitute financial, political or investment advice, betting advice, or any operational recommendation.