Wintermute's head of policy, Ron Hammond, has expressed cautious optimism about the Crypto Clarity Act, estimating its chances of passing this year at around 30%. This assessment is based on the complex and uneven legislative process, with multiple moving parts. The Clarity Act aims to establish clear regulations for the crypto market structure in the U.S., including how the Securities and Exchange Commission and Commodity Futures Trading Commission oversee digital assets. Hammond's estimate aligns with other market signals, such as a recent Punchbowl survey and prediction market Kalshi.

Despite the uncertainty, Hammond sees incremental progress, with lawmakers pushing to move the bill through committee and some aiming for a vote as early as April 20. However, he cautions that timelines have been fluid for months.

The passage of the Clarity Act is considered crucial for institutional adoption of crypto, as it would provide clear rules on which digital assets are securities versus commodities and define how they can be traded and regulated. The current fragmented framework has kept many large asset managers, banks, and pension funds on the sidelines due to legal and compliance risks.

A comprehensive market structure law would reduce ambiguity, giving institutions the confidence to scale their exposure to crypto. Nevertheless, hurdles remain, particularly around the issue of whether stablecoins should offer yield, with traditional financial institutions being the biggest obstacle.

According to Hammond, negotiations have been stuck, with banks refusing to give way. The dispute has already derailed at least one compromise, and expectations for a new version are tempered.

The resistance from banks is shaping the politics around the bill, particularly for Democrats, who are navigating a difficult balancing act. Additional political headwinds could emerge in the coming months, potentially complicating Democratic support. Despite the challenges, Hammond believes the bill still has a viable path forward, with progress in committee and continued negotiations potentially keeping it alive into midyear.

For Wintermute, the stakes are high, as the firm is expanding its U.S. footprint and growing its New York team. The outcome of the Clarity Act is consequential, and while Hammond sees 'light at the end of the tunnel,' he emphasizes that passage in 2026 will require breakthroughs that have so far proved elusive.