The U.S. Senate passed the CLARITY Act on October 8, 2025 by 58 votes to 38. Bitcoin reacts positively, testing $124,000 before stabilising at $121,000. This is the most comprehensive regulatory framework ever adopted for digital assets in the United States.
What the CLARITY Act establishes
The law establishes a clear distinction between digital assets considered securities (under SEC jurisdiction) and those considered commodities (under CFTC jurisdiction). Bitcoin is explicitly classified as a commodity. The law also creates a framework for decentralised exchanges and DeFi protocols.
The impact on institutional demand
Regulatory clarity removes the last barriers to adoption by the most conservative financial institutions — pension funds, insurers, banks. Farside Investors records $2.1 billion in net inflows during the vote week — the best level since June.
On-chain data: the advanced cycle
The MVRV reaches 3.7 according to Glassnode — its highest level since the October 2021 peak. LTH Supply continues to decline to 59%. These indicators signal an advanced bull cycle phase without confirming an imminent end.
What this data does not tell us
The adoption of a favourable law is a one-time catalyst. The structural question is whether this regulatory clarity will generate a new wave of institutional adoption capable of sustaining prices at these elevated levels.