Benchmark: If the Market Structure Act does not pass, the US crypto market will fall into a "structural constraint"

BlockBeats News, January 26 — Wall Street brokerage firm Benchmark stated that if the U.S. Congress fails to pass cryptocurrency market structure legislation this year, the U.S. crypto market will not revert to the heavy regulatory enforcement environment of 2022-2023, but at a critical moment when global adoption and institutional interest are accelerating, market structure will still face ongoing constraints.

Analyst Mark Palmer wrote in a report on Monday: “The lack of legislation will lead to persistent structural risk premiums in most areas of the digital asset ecosystem.” He added that this will limit the valuation expansion potential for platforms primarily targeting the U.S. market.

Palmer pointed out that legislative failure will delay rather than block the maturation process of cryptocurrencies, resulting in the U.S. market being unable to fully realize its potential. In this scenario, investors will prefer asset exposure centered on Bitcoin, strong balance sheets, and infrastructure with stable cash flows, rather than regulatory-sensitive areas such as trading platforms, decentralized finance (DeFi), and altcoins.

The legislation aims to establish a regulatory framework for the U.S. cryptocurrency market by clarifying how digital assets should be classified as commodities or securities and delineating the regulatory responsibilities of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Although the bill passed by the House last year shifted the focus to details such as stablecoin yields and DeFi interfaces, negotiations in the Senate are progressing more slowly and with greater disagreements, increasing the risk that final approval may be delayed until next year.

Palmer believes the market has begun pricing in these timing risks. If the market structure bill fails to pass, trading platforms will continue to face uncertainties about listing, higher compliance costs, and limited expansion of high-margin products, while the monetization process of stablecoins may also be delayed due to unclear rules on yields and distribution.

The report pointed out that, given Bitcoin’s established status as a commodity, Bitcoin and asset management firms focused on Bitcoin will be relatively unaffected, and the regulatory risk exposure of mining companies and energy-supported infrastructure is also minimal.

DeFi and smart contract platforms remain the most vulnerable, with regulatory ambiguity continuing to constrain participation in the U.S. market; meanwhile, custodians and compliance service providers are in relatively defensive positions.

Despite the legislative process being delayed, Palmer still believes that the likelihood of the crypto market structure bill passing is high—even in a diluted version. He emphasized that any form of legislation will help reduce regulatory risks and promote broader institutional participation.