Wall Street-based brokerage firm Benchmark has stated that if the US Congress fails to pass market structure regulations for the cryptocurrency market this year, the US cryptocurrency market will face “structural constraints.”
According to the institution, in such a scenario, while the market would not return to the intense regulation and enforcement environment of 2022–2023, structural pressures would persist at a critical juncture where global adoption and institutional interest are accelerating.
Benchmark analyst Mark Palmer stated in his report that the lack of regulation will create a permanent “structural risk premium” across much of the digital asset ecosystem. Palmer argued that this will particularly limit the potential for valuation expansion for platforms targeting the US market.
According to Palmer, the failure to pass the law will not completely prevent the maturation of cryptocurrencies, but it will delay it. During this process, investors are expected to shift their focus from more regulated trading platforms, decentralized finance (DeFi) projects, and altcoins to Bitcoin-focused assets, companies with strong balance sheets, and infrastructure offering stable cash flow.
The proposed market structure regulation aims to create a clear framework for the US crypto market. The bill seeks to clarify whether digital assets are classified as commodities or securities and to define the division of authority between the SEC and the CFTC. Last year’s House resolution focused on details such as stablecoin yields and DeFi interfaces. However, the slower and more divided progress of the Senate negotiations increases the risk that final approval may be delayed until next year.
The report also stated that the market has already begun pricing in this “time risk.” It noted that if regulation is not implemented, trading platforms will continue to face issues such as listing uncertainty, increased compliance costs, and limited expansion in high-margin products. Furthermore, it predicted that the revenue models of stablecoins could be delayed due to uncertainty in yield and distribution rules.
According to Benchmark, Bitcoin and Bitcoin-focused asset management companies will be relatively less affected by this process thanks to Bitcoin’s established status as a commodity. Mining companies and energy-backed infrastructure providers are also considered to carry a lower risk of regulation.
In contrast, DeFi and smart contract platforms stand out as the most vulnerable areas. The report notes that regulatory uncertainty continues to limit participation in the US market, and companies offering custody and compliance services are in a more defensive position.
*This is not investment advice.