Ric Edelman predicts that the CLARITY Act could open the crypto floodgates

Ric Edelman predicted that up to 95% of institutions with no crypto exposure could enter the market if the CLARITY Act becomes law.

In a recent interview, Edelman said that the disconnect between crypto prices and industrial activity has become more apparent as major financial firms continue to expand their blockchain and tokenization efforts.

While cryptocurrency markets have struggled to maintain momentum amid regulatory uncertainty, Edelman said major Wall Street institutions, including BlackRock, JPMorgan, Morgan Stanley, Franklin Templeton, State Street, Invesco, and Fidelity, continue to build products and services tied to digital assets.

“Crypto prices don’t reflect what’s happening in the crypto world,” Edelman said, pointing to increased institutional involvement as investors remain cautious.

The need for facilities continues to build

Drawing attention to recent industry surveys and discussions with market participants, Edelman said that many institutions that currently do not have crypto exposure are preparing to enter the sector.

According to Edelman, 95% of institutions that do not currently own crypto expect to make their first allocation this year. He added that nearly three-quarters of institutions that already have digital assets intend to increase their existing exposure.

Even with those expectations, capital has not entered the market at the rate many industry participants expected. Edelman said part of that skepticism is due to uncertainty surrounding US crypto legislation, periodic exits from Bitcoin ETFs, and ongoing political opposition from lawmakers like Bernie Sanders and Elizabeth Warren.

Job risk also remains a factor, according to Edelman, who said that many decision makers in financial companies remain more concerned about the professional consequences of adopting crypto than the potential long-term opportunities associated with the asset class.

The clarity of the rules remains the main reason

At the heart of Edelman’s vision is the Clear Act, a market structure bill that would establish rules governing digital assets and define regulatory obligations across the industry.

According to Edelman, many institutional investors view the legislation as an event that could finally provide the certainty needed for a larger role from traditional financial firms. He said that the passing of this bill will give companies a clear guide on how to operate in this sector and can remove one of the biggest barriers to adoption.

His comments come as Senate lawmakers continue to review legislation ahead of a shrinking legislative calendar. Although the US House has scheduled a hearing on the bill on July 17, the Senate has not yet announced a date for the vote.

More tests have emerged in recent weeks. The Alliance to End Human Trafficking (AEHT) has urged Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer to revisit Section 604 of the bill, which would include the Blockchain Regulatory Assurance Act.

In a letter to lawmakers, the organization said the provision could create loopholes that make it difficult for authorities to track financial activities related to crimes such as human trafficking and called for stronger anti-money laundering laws before the bill goes ahead.

Despite those discussions, Edelman noted that White House crypto advisor Patrick Witt indicated that the law could pass on July 4.

According to Edelman, a successful vote would encourage traditional financial institutions to fully participate in the crypto market. He also warned that a delay or failure could dampen sentiment as investors react to a loss of legislative momentum.

Looking beyond regulation, Edelman said he remains optimistic about digital assets and expects Bitcoin to eventually reach $150,000 or more, although he added that regulatory developments may have a larger role in determining the market’s performance this year.