The structural constraints of the American crypto market: when legislation is delayed

Benchmark analyst Mark Palmer warns of the structural constraints currently weighing on the U.S. cryptocurrency market. According to his analysis reported by Odaily, the lack of a clear legislative framework this year will keep digital assets in a state of regulatory uncertainty. This situation is not without consequences for investors and platforms operating in the United States.

Lack of legislation leads to a persistent risk premium

Without the adoption of a law structuring the market, Palmer anticipates a lasting structural risk premium that will significantly limit the valuation growth of platforms influenced by U.S. regulation. This lack of clarity delays the sector’s maturation and creates an environment where investors adopt a defensive strategy. Rather than diversifying their positions, they focus their resources on assets perceived as more solid: Bitcoin, miners, and infrastructure generating stable and predictable cash flows.

Bitcoin and infrastructure favored, DeFi and altcoins exposed to regulatory constraints

Market segmentation is increasing. On one side, Bitcoin and energy infrastructure benefit from much lower exposure to regulatory risks. On the other, exchanges, decentralized finance (DeFi), and altcoins remain particularly vulnerable to regulatory policy changes. Smart contracts and DeFi protocols, by their decentralized nature, create the very uncertainty that U.S. regulators are striving to clarify. This market fragmentation reflects the strategic caution of institutional players in the face of current environmental constraints.

Asset classification: a key issue for SEC and CFTC

The proposed legislation aims to establish a precise classification of digital assets as commodities or securities, and then delineate the respective responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Clarifying regulatory roles represents a major turning point, as it would dispel much of the ambiguity currently hanging over the sector.

Outlook: a higher probability of adoption than doubts

Despite delays, Palmer remains optimistic about the chances of the bill passing, estimating that the likelihood of adoption exceeds that of maintaining the status quo. Any version of this legislation would significantly reduce regulatory risks and open the door to broader institutional participation. Currently, these same structural constraints that limit valuation could turn into opportunities once the legal framework is solidified. Institutional investors are precisely waiting for this clarification to increase their commitments in the U.S. cryptocurrency market.