The Crypto Industry Has Spent Nearly $200 Million to Pass New Pro-Crypto Legislation. Here's What Investors Need to Know.

The crypto industry poured $189 million into the 2026 U.S. midterm elections by the end of June, making it the single largest corporate political spender this election cycle, per a Public Citizen report. Yet even with that fire hose of strings-attached cash pointed directly at the legislators on Capitol Hill, prediction markets currently give the industry's biggest legislative goal, the Clarity Act, just a 31% chance of becoming law by year-end. For holders of Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and XRP (CRYPTO: XRP), the bill could be quite important.

Each coin has different exposure to what this bill would change, so let's take a look at what investors need to know.

Image source: Getty Images.

The state of the bill

The Clarity Act cleared the House of Representatives in July 2025 and the Senate Banking committee in May, and it's now in limbo with no vote scheduled. The August recess is coming up, which would kick the next window for passing the bill toward the end of the year.

So far, there's a deadlock that's preventing an expedient passage of the bill.

Democrats want to incorporate ethics language into the bill that would prohibit government officials and their families from profiting from digital assets.

That particular demand was galvanized by a July 1 filing indicating that President Donald Trump had earned $1.4 billion from crypto in 2025, including via his official meme coin, which is down 98% since its launch in early 2025. Another stumbling block is the unanswered question of whether stablecoins should be allowed to pay a yield when they're backed by yield-generating assets like U.S. Treasuries.

The three changes that could rewire the market

As it's currently envisioned, the Clarity Act would do three things.

First, it'd grant the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over spot markets in digital commodities, replacing the stewardship of the Securities and Exchange Commission (SEC) and implementing a cohesive set of regulations while discarding the prior patchwork. It would also create a decentralization test for allowing certain tokens to become commodities once their networks mature. Furthermore, it would codify the ruling from earlier this year that classified XRP, Ethereum, and Bitcoin as commodities into federal statute.

Assuming those three pillars are still in place if the bill ends up passing, Bitcoin would get the smallest incremental lift, if it got one at all. Regulated Bitcoin futures have existed since 2017, and spot exchange-traded funds (ETFs) have been around since January 2024. Nothing about its thesis would change.

Ethereum has a bit more at stake. Two U.S. spot Ether staking ETFs are already trading, with each passing a staking yield of 2% to 3% in addition to price exposure. Those assets exist because of the March regulatory interpretation that the bill would codify. If the bill doesn't pass, staking ETFs probably won't disappear, but the legal ground beneath them might be a bit of an impediment to more institutional adoption.

XRP has the biggest exposure of any major coin. Gaining a statutory commodity status for the coin would permanently extinguish the regulatory tail risk of holding or using the coin in a financial context. Because of that, both Standard Chartered and JPMorgan analysts project between $4 billion and $8 billion in XRP ETF inflows if it passes.

Watch for a cloture motion before Aug. 8. If that happens, the U.S. regulatory picture for crypto will be a lot more permissive of a bull run in the near future. If not, the $189 million in political spending will need to seek a return in 2027, which might be even tougher than this year.

JPMorgan Chase is an advertising partner of Motley Fool Money. Alex Carchidi has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, JPMorgan Chase, and XRP. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy.