Policy Share Share this article Copy linkX (Twitter)LinkedInFacebookEmail Market structure bill delay seen capping U.S. Policy Share Share this article Copy linkX (Twitter)LinkedInFacebookEmail Market structure bill delay seen capping U.S.

Market structure bill delay seen capping U.S. crypto valuations, Benchmark says

7 min read
Share
Share this article
Copy linkX (Twitter)LinkedInFacebookEmail

Market structure bill delay seen capping U.S. crypto valuations, Benchmark says

Failure to pass market structure legislation this year wouldn’t derail U.S. crypto, but it would prolong regulatory ambiguity, favoring bitcoin and infrastructure.

By Will Canny, AI Boost|Edited by Nikhilesh De
Jan 26, 2026, 2:30 p.m.
Make us preferred on Google
Market structure bill delay seen capping U.S. crypto valuations, Benchmark says. (CoinDesk)

What to know:

  • A lack of market structure legislation keeps a regulatory risk premium in U.S. crypto, limiting valuation expansion, said Benchmark analyst Mark Palmer.
  • Bitcoin and infrastructure are best positioned; exchanges, DeFi and altcoins are expected to lag.
  • Palmer still sees passage as more likely than not, though timing risk is rising.

If Congress fails to pass market structure legislation this year, the U.S. crypto market would not revert to the enforcement-heavy environment of 2022 and 2023, but it would remain structurally constrained at a moment when global adoption and institutional interest are accelerating, Wall Street broker Benchmark said.

"The absence of legislation would cause a structural risk premium to persist across much of the digital asset ecosystem," wrote analyst Mark Palmer in the Monday report, adding that this would cap valuation expansion for U.S.-exposed platforms.

STORY CONTINUES BELOW
Don't miss another story.Subscribe to the State of Crypto Newsletter today. See all newsletters
Sign me up

Palmer said failure to pass legislation would delay, not derail, crypto’s maturation, leaving the U.S. market operating below its potential as investors favor bitcoin-centric exposure, strong balance sheets and cash-flowing infrastructure over regulatory-sensitive segments such as exchanges, decentralized finance (DeFi) and altcoins.

The bill is intended to define U.S. crypto market structure by defining how digital assets might be classified as commodities or securities and clarifying Securities and Exchange (SEC) and Commodity Futures Trading Commission (CFTC) oversight. While House passage last year shifted the debate toward details like stablecoin yield and DeFi interfaces, Senate negotiations have been slower and more contentious, raising the risk that final approval slips into next year.

Palmer said markets are already pricing in that timing risk. Without a market structure bill, exchanges would face continued listing uncertainty, higher compliance costs and limits on expanding into higher-margin products, while stablecoin monetization could be delayed by unresolved rules around yield and distribution.

Bitcoin BTC$87,948.56 and bitcoin-focused treasury companies would be comparatively insulated, Palmer said, given the crypto's established commodity status, with miners and energy-backed infrastructure also less exposed.

DeFi and smart-contract platforms remain the most vulnerable, as regulatory ambiguity continues to constrain U.S. participation, while custody and compliance providers would hold relatively defensive positions, the report added.

Despite delays, Palmer still views passage of a crypto market structure bill as more likely than not, even if diluted, arguing that any version of the legislation would reduce regulatory risk and unlock broader institutional participation.

Read more: Coinbase CEO Brian Armstrong says company opposed crypto bill to protect consumers

Cryptocurrency RegulationsMarket Structure LegislationBenchmark
AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.

More For You

KuCoin Hits Record Market Share as 2025 Volumes Outpace Crypto Market

KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.

What to know:

  • KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
  • This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
  • Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
  • Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
  • Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
View Full Report

More For You

Japan ETFs said likely to trade by 2028 as SBI, Nomura ready products

The Financial Services Agency is moving to classify crypto as an eligible asset for exchange-traded funds, with potential inflows reaching $6.4 billion, according to Nikkei.

What to know:

  • Japan’s Financial Services Agency plans to allow cryptocurrency exchange-traded funds, and products could list in 2028, Nikkei reported.
  • FSA approval could potentially give retail investors access to bitcoin and other digital assets under the Investment Trust Act.
  • SBI Holdings and Nomura Holdings have expressed interest in offers ETFs, and any products would also need a go-ahead from the Tokyo Stock Exchange.
Read full story
Latest Crypto News

CoinDesk 20 Performance Update: Polygon (POL) Drops 4%, Leading Index Lower

BitMine, the largest Ethereum treasury firm, makes biggest ether purchase of 2026

Zerohash is in talks to raise $250 million at $1.5 billion valuation after walking away from Mastercard takeover

Coreweave stock gains 9% on fresh $2 billion Nvidia investment

Strategy purchased $264 million in bitcoin last week, a slowdown from recent acquisition pace

Bitcoin trails gold as yen intervention concerns weigh on risk assets

Top Stories

Bitcoin rises from one-month low while derivatives flash near-term stress: Crypto Markets Today

The big U.S. crypto bill is on the move. Here is what it means for everyday users

Key bitcoin price levels to watch as downward pressure builds

Here's what Fed's highly anticipated rate decision this week means for bitcoin and the dollar

Ark Invest bought $21.5 million of crypto company shares as bitcoin fell under $90,000

Bitcoin income windfall drives Metaplanet to revise full-year revenue forecast upward

Latest Crypto News

CoinDesk 20 Performance Update: Polygon (POL) Drops 4%, Leading Index Lower

BitMine, the largest Ethereum treasury firm, makes biggest ether purchase of 2026

Zerohash is in talks to raise $250 million at $1.5 billion valuation after walking away from Mastercard takeover

Coreweave stock gains 9% on fresh $2 billion Nvidia investment

Strategy purchased $264 million in bitcoin last week, a slowdown from recent acquisition pace

Bitcoin trails gold as yen intervention concerns weigh on risk assets

Top Stories

Bitcoin rises from one-month low while derivatives flash near-term stress: Crypto Markets Today

The big U.S. crypto bill is on the move. Here is what it means for everyday users

Key bitcoin price levels to watch as downward pressure builds

Here's what Fed's highly anticipated rate decision this week means for bitcoin and the dollar

Ark Invest bought $21.5 million of crypto company shares as bitcoin fell under $90,000

Bitcoin income windfall drives Metaplanet to revise full-year revenue forecast upward

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Trading time: Tonight, the US GDP and the upcoming non-farm data will become the market focus. Institutions are bullish on BTC to $120,000 in the second quarter.

Trading time: Tonight, the US GDP and the upcoming non-farm data will become the market focus. Institutions are bullish on BTC to $120,000 in the second quarter.

Daily market key data review and trend analysis, produced by PANews.
Share
PANews2025/04/30 13:50
Ethereum Fusaka Upgrade Set for December 3 Mainnet Launch, Blob Capacity to Double

Ethereum Fusaka Upgrade Set for December 3 Mainnet Launch, Blob Capacity to Double

Ethereum developers confirmed the Fusaka upgrade will activate on mainnet on December 3, 2025, following a systematic testnet rollout beginning on October 1 on Holesky. The major hard fork will implement around 11-12 Ethereum Improvement Proposals targeting scalability, node efficiency, and data availability improvements without adding new user-facing features. According to Christine Kim, the upgrade introduces a phased blob capacity expansion through Blob Parameter Only forks occurring two weeks after Fusaka activation. Initially maintaining current blob limits of 6/9 target/max, the first BPO fork will increase capacity to 10/15 blobs one week later. A second BPO fork will further expand limits to 14/21 blobs, more than doubling total capacity within two weeks. Strategic Infrastructure Overhaul Fusaka prioritizes backend protocol improvements over user-facing features, focusing on making Ethereum faster and less resource-intensive. The upgrade includes PeerDAS implementation through EIP-7594, allowing validator nodes to verify data by sampling small pieces rather than downloading entire blobs. This reduces bandwidth and storage requirements while enhancing Layer 2 rollup scalability. The upgrade builds on recent gas limit increases from 30 million to 45 million gas, with ongoing discussions for further expansion. EIP-7935 proposes increasing limits to 150 million gas, potentially enabling significantly higher transaction throughput. These improvements complement broader scalability efforts, including EIP-9698, which suggests a 100x gas limit increase over two years to reach 2,000 transactions per second. Fusaka removes the previously planned EVM Object Format redesign to reduce complexity while maintaining focus on essential infrastructure improvements. The upgrade introduces bounded base fees for blob transactions via EIP-7918, creating more predictable transaction costs for data-heavy applications. Enhanced spam resistance and security improvements strengthen network resilience against scalability bottlenecks and attacks. Technical Implementation and Testing Timeline The Fusaka rollout follows a conservative four-phase approach across Ethereum testnets before mainnet deployment. Holesky upgrade occurs October 1, followed by Sepolia on October 14 and Hoodi on October 28. Each testnet will undergo the complete BPO fork sequence to validate the blob capacity expansion mechanism. BPO forks activate automatically based on predetermined epochs rather than requiring separate hard fork processes. On mainnet, the first BPO fork launches December 17, increasing blob capacity to 10/15 target/max. The second BPO fork activates January 7, 2026, reaching the final capacity of 14/21 blobs. This automated approach enables flexible blob scaling without requiring full network upgrades. Notably, node operators face release deadlines ranging from September 25 for Holesky to November 3 for mainnet preparation. The staggered timeline, according to the developers, allows comprehensive testing while giving infrastructure providers sufficient preparation time. Speculatively, the developers use this backward-compatible approach to ensure smooth transitions with minimal disruption to existing applications. PeerDAS implementation reduces node resource demands, potentially increasing network decentralization by lowering barriers for smaller operators. The technology enables more efficient data availability sampling, crucial for supporting growing Layer 2 rollup adoption. Overall, these improvements, combined with increased gas limits, will enable Ethereum to handle higher transaction volumes while maintaining security guarantees. Addressing Network Scalability Pressures The Fusaka upgrade addresses mounting pressure for Ethereum base layer improvements amid criticism of Layer 2 fragmentation strategies. Critics argue that reliance on rollups has created isolated chains with limited interoperability, complicating user experiences. The upgrade’s focus on infrastructure improvements aims to enhance base layer capacity while supporting continued Layer 2 growth. The recent validator queue controversy particularly highlights ongoing network scalability challenges. According to a Cryptonews report covered yesterday, currently, over 2M ETH sits in exit queues facing 43-day delays, while entry queues process in just 7 days.Ethereum Validator Queue (Source: ValidatorQueue) However, Vitalik Buterin defended these delays as essential for network security, comparing validator commitments to military service requiring “friction in quitting.” The upgrade coincides with growing institutional interest in Ethereum infrastructure, with VanEck predicting that Layer 2 networks could reach $1 trillion market capitalization within six years. Fusaka’s emphasis on data availability and node efficiency supports Ethereum’s evolution toward seamless cross-chain interoperability. The upgrade complements initiatives like the Open Intents Framework, where Coinbase Payments recently joined as a core contributor. The initiative, if successful, will address the $21B surge in cross-chain crime. These coordinated efforts aim to unify the fragmented multichain experience while maintaining Ethereum’s security and decentralization principles
Share
CryptoNews2025/09/19 16:37
VectorUSA Achieves Fortinet’s Engage Preferred Services Partner Designation

VectorUSA Achieves Fortinet’s Engage Preferred Services Partner Designation

TORRANCE, Calif., Feb. 3, 2026 /PRNewswire/ — VectorUSA, a trusted technology solutions provider, specializes in delivering integrated IT, security, and infrastructure
Share
AI Journal2026/02/05 00:02