Ric Edelman has predicted that up to 95% of institutions without crypto exposure could enter the market if the CLARITY Act becomes law.
Summary
- Ric Edelman said up to 95% of institutions without crypto exposure could invest if the CLARITY Act becomes law.
- Edelman identified regulatory certainty as the main factor preventing larger institutional crypto allocations.
- The CLARITY Act faces Senate scrutiny as critics raise concerns about anti-money laundering safeguards in DeFi provisions.
In a recent interview, Edelman said the disconnect between crypto prices and industry activity has become increasingly noticeable as large financial firms continue expanding their blockchain and tokenization efforts.
While cryptocurrency markets have struggled to maintain momentum amid regulatory uncertainty, Edelman said major Wall Street institutions, including BlackRock, JPMorgan, Morgan Stanley, Franklin Templeton, State Street, Invesco, and Fidelity, continue building products and services tied to digital assets.
“Crypto prices are not reflecting what’s happening in the world of crypto,” Edelman said, pointing to rising institutional engagement even as investors remain cautious.
Institutional demand continues to build
Drawing attention to recent industry surveys and conversations with market participants, Edelman said many institutions that currently have no crypto exposure are preparing to enter the sector.
According to Edelman, 95% of institutions that do not currently own crypto expect to make their first allocation this year. He added that roughly three-quarters of institutions that already hold digital assets intend to increase their existing exposure.
Even with those expectations, capital has not yet entered the market at the scale many industry participants anticipated. Edelman attributed part of that hesitation to uncertainty surrounding U.S. crypto legislation, periodic Bitcoin ETF outflows, and continued political opposition from lawmakers such as Bernie Sanders and Elizabeth Warren.
Career risk also remains a factor, according to Edelman, who said many decision-makers at financial firms remain more concerned about the professional consequences of adopting crypto than the potential long-term opportunities associated with the asset class.
Regulatory clarity remains the key catalyst
At the center of Edelman’s outlook is the CLARITY Act, a market structure bill that would establish rules governing digital assets and define regulatory responsibilities across the industry.
According to Edelman, many institutional investors view the legislation as the event that could finally provide the certainty needed for large-scale participation from traditional finance firms. He said passage of the bill would give companies clearer guidance on how to operate in the sector and could remove one of the biggest barriers to adoption.
His comments come as Senate lawmakers continue evaluating the legislation ahead of a narrowing legislative calendar. Although the U.S. House has scheduled a hearing on the bill for July 17, the Senate has not yet announced a floor vote date.
Additional scrutiny has emerged in recent weeks. The Alliance to End Human Trafficking (AEHT) has urged Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer to revisit Section 604 of the legislation, which would incorporate the Blockchain Regulatory Certainty Act.
In a letter to lawmakers, the organization argued the provision could create gaps that make it harder for authorities to track financial activity connected to crimes such as human trafficking and called for stronger anti-money laundering safeguards before the bill advances.
Despite those debates, Edelman noted that White House crypto adviser Patrick Witt had indicated the legislation could pass by July 4.
According to Edelman, a successful vote could encourage traditional financial institutions to become fully engaged in the crypto market. He also warned that delays or failure could weigh on sentiment as investors react to lost legislative momentum.
Looking beyond regulation, Edelman said he remains optimistic about digital assets and expects Bitcoin could eventually reach $150,000 or higher, although he added that regulatory developments are likely to play a major role in determining market performance this year.
