CLARITY Act Failure Could Spark Bitcoin Selloff Before Q4 Rebound
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IN SHORT
Bernstein predicts a potential Bitcoin selloff if the CLARITY Act fails to pass before the Senate's August recess, though the firm anticipates a Q4 rebound. Meanwhile, American Bitcoin, co-founded by Donald Trump's sons, reported a $57.2 million net loss for the second quarter. Despite the loss, the company increased its Bitcoin holdings to over 8,000 BTC and saw an 8% rise in mining revenue to $67 million.
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Key Numbers
$57.2 millionAmerican Bitcoin net loss in Q2
8%American Bitcoin mining revenue increase
$67 millionAmerican Bitcoin mining revenue in Q2
8,000 BTCAmerican Bitcoin treasury holdings
Who's Involved
Bernstein
financial firm issuing market warnings and outlooks
American Bitcoin
company reporting Q2 financial results and Bitcoin holdings
Donald Trump's sons
co-founders of American Bitcoin
Key facts
Bernstein warns of a potential Bitcoin selloff if the CLARITY Act fails to pass before the August recess.
Bernstein remains constructive on the market's Q4 rebound potential.
Bernstein anticipates agency rulemaking even without the CLARITY Act.
American Bitcoin reported a $57.2 million net loss in the second quarter.
American Bitcoin achieved record Bitcoin production.
American Bitcoin's mining revenue rose 8% to $67 million in Q2.
American Bitcoin expanded its Bitcoin treasury to over 8,000 BTC.
Bernstein analysts are warning of a potential short-term selloff in Bitcoin and other cryptocurrencies if the CLARITY Act does not pass the U.S. Senate before the August recess. Despite this potential hurdle, Bernstein maintains a constructive outlook for a market rebound in the fourth quarter. The firm anticipates that regulatory agencies will proceed with rulemaking even in the absence of the CLARITY Act.
In parallel, American Bitcoin, a company co-founded by Donald Trump's sons, has reported a significant net loss of $57.2 million for the second quarter. This financial result occurred despite the company achieving record Bitcoin production and a notable increase in its mining revenue. American Bitcoin's mining revenue grew by 8% to reach $67 million during the quarter. The company also continued to expand its holdings of the cryptocurrency, increasing its Bitcoin treasury to over 8,000 BTC.
↳ Why This Matters
Bernstein analysts are warning of a potential short-term selloff in Bitcoin and other cryptocurrencies if the CLARITY Act does not pass the U.S. Senate before the August recess. Despite this potential hurdle, Bernstein maintains a constructive outlook for a market rebound in the fourth quarter. The firm anticipates that regulatory agencies will proceed with rulemaking even in the absence of the CLARITY Act.
Frequently asked questions
The CLARITY Act, or Digital Asset Market Clarity Act, is proposed U.S. legislation aiming to establish the first comprehensive regulatory framework for digital assets, dividing jurisdiction between the SEC and CFTC.
Prediction markets currently place the odds of the CLARITY Act passing this year at 31%, a decrease attributed to Democratic opposition and concerns over ethics provisions.
Project Crypto is a joint initiative launched by the SEC and CFTC in July 2025 to build a workable digital asset framework using existing authority, including clearer token taxonomy and guidance on DeFi and self-custody.
Bernstein analysts expect the crypto market to bottom and begin showing momentum towards late Q3 and early Q4, with year-end 2026 price targets ranging from $100,000 to $150,000.
What Happens Next
01Monitor the Senate floor schedule for a procedural vote on the CLARITY Act.
02Watch for any last-minute ethics agreements related to the bill.
03Observe agency statements under Project Crypto for signs of accelerated rulemaking.
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