U.S. Crypto Market Faces Structural Constraints Without Congressional Action

Benchmark, a Wall Street brokerage firm, has indicated that the U.S. cryptocurrency market will face structural limitations if Congress fails to pass a market structure bill this year. According to Odaily, analyst Mark Palmer highlighted in a report that the absence of legislation will lead to a persistent structural risk premium, thereby restricting valuation expansion for platforms influenced by the U.S. This situation is expected to delay the maturation of cryptocurrencies, prompting investors to favor Bitcoin-centric investments, robust balance sheets, and cash flow-generating infrastructure over exchanges, decentralized finance (DeFi), and altcoins, which are sensitive to regulatory changes. DeFi and smart contract platforms are particularly vulnerable, whereas Bitcoin, miners, and energy-supported infrastructure face less risk. The proposed bill aims to define how digital assets are classified as commodities or securities and clarify the regulatory roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Despite potential delays, Palmer believes the likelihood of the bill passing is greater than not, and any version of the legislation would reduce regulatory risks and encourage broader institutional participation.