Regulatory Shackles Near Removal, $5 Trillion Capital Tsunami Set to Hit Crypto Markets

▲ Cryptocurrency regulation / ChatGPT-generated image

Analysts say that if the U.S. cryptocurrency market structure bill (CLARITY) passes Congress, as much as $5 trillion in institutional capital could flow into the digital asset market, potentially triggering an unprecedented bull run.

According to crypto-focused outlet NewsBTC on February 25 (local time), digital asset expert 360Strategy (360Trader) recently stated on X (formerly Twitter) that trillions of dollars in institutional funds currently waiting on the sidelines for regulatory clarity would begin flowing in earnest once the bill is passed. The expert projected that the legislation would serve as a decisive catalyst for opening the doors to Wall Street’s massive capital entering the digital asset market and could ultimately spark inflows exceeding $5 trillion over time.

Institutional interest in the digital asset market has already been acknowledged by the White House. Patrick Witt, White House Digital Asset Advisor, noted that significant institutional capital has effectively been sidelined due to legal uncertainty. It is widely known that major asset managers, including BlackRock, the world’s largest asset management firm, face constraints under the current fragmented regulatory environment. If the U.S. cryptocurrency market structure bill is enacted, the total crypto market capitalization could surpass $4 trillion, potentially leading to a rally that outpaces the surge seen following the approval of spot Bitcoin (BTC) ETFs in 2024.

Changes in the stablecoin market are also a key factor to watch. Under a new regulatory framework, banks would have a legal basis to issue stablecoins directly. As of 2025, the stablecoin supply has already reached $300 billion, with annual transaction volume hitting $33 trillion—surpassing the processing volume of the Visa network. In particular, if major banks such as JPMorgan launch their own stablecoins and integrate them into real-world payment systems, it could mark a significant turning point for the digital asset industry.

Competitive yields are another driver of potential capital migration. Some stablecoin products currently offer returns ranging from 3% to 5%, significantly outperforming traditional deposit accounts, which average around 0.07%. 360Strategy analyzed that this yield gap could lead to a reallocation of up to $6 trillion from conventional bank deposits into crypto-linked financial products. In this process, pension funds, university endowments, and individual investors alike are expected to increase their exposure to high-yield digital asset products.

Traditional financial institutions are also expected to begin actively integrating decentralized finance technologies to build more efficient transaction infrastructure. However, legislation has faced some delays as conventional banks continue to express opposition to the profit structure of stablecoins, citing concerns over customer deposit outflows. Once regulatory barriers are lifted, vast amounts of dormant capital could pour into the digital asset market, potentially ushering in a new bull market unlike anything previously experienced.

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