Polymarket Odds for Clarity Act Plunge From 72% to 42% Before Partial Recovery

TL;DR

• Regulatory Odds Drop: Polymarket odds for the Clarity Act fell from 72% to 42%, signaling reduced confidence in near‑term regulatory clarity.
• Institutional Impact: The Act’s potential to define agency roles and stablecoin treatment remains central to investor expectations, and the decline weakens hopes for improved compliance certainty.
• Macro Pressure: Geopolitical tensions and new U.S. tariff issues are amplifying negative sentiment, making markets more sensitive to shifting legislative probabilities.
  

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The sharp decline in Polymarket odds for the Clarity Act passing this year has injected fresh uncertainty into an already fragile crypto environment. After sitting at 72%, expectations collapsed to 42%, signaling a shift in sentiment around whether lawmakers will deliver the regulatory structure many in the industry have been anticipating. The move reflects growing doubt that clear rules for digital assets will arrive soon enough to stabilize confidence across markets.

😰 The Polymarket odds for the Clarity Act passing has just dropped from 72% to 42%. Many crypto investors and firms are still counting on this passage of law to provide clear rules about how digital assets should be regulated, such as which government agencies oversee which… https://t.co/6LHj43WAuh pic.twitter.com/NHD09P7agX

— Santiment (@santimentfeed) February 23, 2026

Regulatory Expectations Shift as Odds Fall

The Clarity Act has long been viewed as a foundational framework that could define which U.S. agencies oversee different types of tokens and how stablecoins should be treated. Its passage would reduce ambiguity around enforcement risk, a key barrier for institutions and banks that require predictable compliance structures. With odds now near 52%, the market is recalibrating expectations for near‑term clarity, weakening a narrative that had supported optimism around transparency and institutional participation.

For crypto firms and traditional financial players alike, the Clarity Act represents more than legislative housekeeping. Clear boundaries could lower compliance risk, encourage product development, and support broader ecosystem engagement. Investors have relied on the Clarity Act to unlock capital inflows and alleviate concerns about unpredictable regulatory action. The sudden drop in prediction market confidence suggests that this hoped‑for stability may remain out of reach for longer than expected.

Macro Strain Amplifies Negative Sentiment

The timing of the decline compounds existing pressures. The broader crypto sentiment has been strained by geopolitical tensions and macroeconomic stress, including renewed U.S. tariff announcements that have contributed to risk-off positioning. When regulatory optimism fades during periods of macro uncertainty, negative sentiment tends to intensify. Santiment notes that lower odds may trigger additional fear‑driven commentary across social platforms, especially if prices continue to slump.

Despite the downturn in expectations, prediction markets reflect sentiment rather than confirmed outcomes. Historically, shifts in regulatory outlook influence short‑term volatility without altering long‑term structural trends. For now, the key question is whether odds stabilize or continue falling. Until clearer signals emerge, market sentiment is likely to remain highly reactive to political developments and broader macro conditions.