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

Core Viewpoint - The U.S. crypto market is at risk of remaining structurally constrained without the passage of market structure legislation, despite increasing global adoption and institutional interest [1]. Group 1: Legislative Impact - The absence of legislation would lead to a persistent structural risk premium across the digital asset ecosystem, limiting valuation expansion for U.S.-exposed platforms [2]. - The proposed bill aims to clarify the classification of digital assets as commodities or securities and define the oversight roles of the SEC and CFTC, but Senate negotiations are slow, raising the risk of delays into next year [4]. Group 2: Market Dynamics - Failure to pass legislation would delay the maturation of the crypto market, causing U.S. markets to operate below potential as investors prefer bitcoin-centric assets and strong balance sheets over regulatory-sensitive segments like exchanges and DeFi [3]. - Without a market structure bill, exchanges would face ongoing listing uncertainties, increased compliance costs, and limitations on expanding into higher-margin products, while stablecoin monetization could be hindered by unresolved regulatory issues [5]. Group 3: Asset Vulnerability - Bitcoin and bitcoin-focused treasury companies are expected to be relatively insulated due to bitcoin's established commodity status, while DeFi and smart-contract platforms remain vulnerable to regulatory ambiguity [6]. - Despite current delays, the passage of a crypto market structure bill is still viewed as likely, which would reduce regulatory risk and encourage broader institutional participation [7].