Market FUD Grows Louder As Polymarket Odds For CLARITY Act Passing Drop To 42%

Market uncertainty is intensifying across the crypto sector, as fresh data from prediction platform Polymarket shows declining confidence in the passage of the highly anticipated CLARITY Act. Odds of the legislation passing this year have now fallen sharply, amplifying fear, uncertainty, and doubt (FUD) across digital asset markets.

Sharp Drop in Polymarket CLARITY Act Odds

Blockchain analytics firm Santiment revealed in a recent X post that Polymarket odds for the passage of the CLARITY Act have dipped significantly, from 72% to 42%. The steep decline has raised eyebrows among traders and policy watchers alike.

😰 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

Interestingly, Polymarket is a blockchain-based prediction market that allows users to bet on real-world events, and it has become an increasingly popular sentiment gauge in the crypto market. Because participants put capital behind their predictions, many investors consider their odds a real-time reflection of collective market expectations.

Thus, the latest drop to 42% hints that market participants are growing increasingly skeptical about the bill’s chances of passing in the U.S. Congress. The CLARITY Act, designed to establish clearer rules for digital assets and define the roles of regulatory agencies, has long been viewed as a pivotal step toward regulatory certainty. A decline of this magnitude suggests that confidence in near-term legislative progress may be fading.

FUD Spreads Across the Crypto Market

As regulatory optimism cools, FUD has grown louder across social media platforms and trading communities. Investors fear that without comprehensive legislation, enforcement-led regulation could remain the dominant approach, creating prolonged uncertainty for exchanges, token issuers, and decentralized finance projects.

Interestingly, that level of uncertainty can discourage investment, innovation, and mass adoption. It can also disrupt market stability and undermine the industry’s bullish narrative built around increased transparency and clearer compliance standards. For many institutional players sitting on the sidelines, regulatory ambiguity remains one of the biggest barriers to deeper participation in the digital asset space.

Adding to the mixed outlook, U.S. President Donald Trump recently announced a new 15% global tariff sanction despite a Supreme Court ruling that such sanctions are not legal. The development has further unsettled financial markets, compounding macroeconomic concerns alongside crypto-specific regulatory uncertainty. 

Thus, Santiment expects the market to remain dominated by FUD, especially if prices continue to slump. However, the analytics firm cautioned against overreaction, emphasizing that prediction market odds and political headlines remain speculative and can shift quickly.

Long-Term Outlook Hinges on Regulatory Clarity

Despite the dip in confidence, U.S. Secretary of the Treasury Scott Bessent, in a recent interview, urged all parties involved to vote on the bill and send it to the president’s desk for signing by spring. Bessent had earlier reiterated that the CLARITY bill would give much-needed comfort to the crypto market by reducing regulatory ambiguity and fostering structured oversight.

However, the bill’s passage currently remains in limbo as the Senate Banking Committee has reportedly refused to hold a markup session and vote on the legislation due to disagreements over stablecoin yield restrictions. The standoff has stalled momentum at a critical stage, leaving market participants uncertain about the timeline for progress.