HSBC Predicts US Crypto Bill Passage Despite Coinbase Opposition

VADODARA, January 28, 2026 — HSBC has projected that the U.S. crypto market structure bill will likely pass into law despite Coinbase withdrawing its support, according to a CoinDesk report citing the banking giant's analysis. This latest crypto news reveals institutional pressure for regulatory clarity outweighs industry objections, with HSBC arguing that imperfect legislation now beats potential harsher measures later.

Investigation: The Regulatory Standoff

HSBC's analysis indicates that while Coinbase has withdrawn support for the current draft, a compromise remains politically viable. According to the bank's statement, a legal baseline provides essential stability for institutional entry. Market structure suggests that without clear regulation, traditional finance cannot allocate capital efficiently to digital assets.

Coinbase previously pulled support citing concerns over potential stablecoin interest payment restrictions. The exchange's withdrawal created a significant Fair Value Gap (FVG) between regulatory expectations and market reality. Consequently, institutional players now face uncertainty about compliance requirements for yield-generating products.

Market Context & Historical Precedent

Historically, regulatory uncertainty has created persistent headwinds for crypto adoption. Similar to the 2021 correction when China's mining ban triggered a 40% drawdown, current regulatory ambiguity suppresses institutional participation. In contrast, the 2024 Bitcoin ETF approvals demonstrated how regulatory clarity can catalyze capital inflows.

Underlying this trend is a fundamental shift in market structure. Post-2023 banking crisis, traditional institutions now view crypto as a necessary portfolio component rather than speculative asset. The Federal Reserve's monetary policy framework, detailed on FederalReserve.gov, increasingly considers digital asset correlations with traditional markets.

Related regulatory developments include JP Morgan and Citadel challenging SEC exemptions and Bitcoin breaking below $89,000 amid fear sentiment.

Technical Architecture & Price Action

Market structure currently shows Bitcoin testing critical support at $89,403. The 200-day moving average provides dynamic support around $85,000, while Fibonacci retracement levels from the 2025 high indicate potential accumulation zones. On-chain data reveals significant UTXO age bands maturing, suggesting long-term holders remain confident despite regulatory uncertainty.

Volume profile analysis indicates weak liquidity above $95,000, creating a natural resistance zone. The current price action resembles the 2019 consolidation phase before the halving-driven rally. Market analysts note that regulatory clarity could trigger a Gamma Squeeze as options dealers hedge sudden volatility.

By The Numbers

Why It Matters

Regulatory clarity fundamentally alters market microstructure. According to on-chain data, institutional wallets remain under-allocated to digital assets due to compliance uncertainty. A clear legal framework would enable pension funds, insurance companies, and sovereign wealth funds to enter the space systematically.

Market structure suggests that current legislation, while imperfect, creates predictable compliance costs. This predictability allows quantitative models to price regulatory risk accurately. Consequently, institutional capital can flow more efficiently, reducing volatility and improving market depth.

Expert Commentary

"The CoinMarketBuzz Intelligence Desk analysis indicates that regulatory clarity represents the final barrier to institutional adoption. While the current bill has flaws, it establishes jurisdictional boundaries that traditional finance requires for portfolio construction. The alternative—continued regulatory ambiguity—creates systemic risk that outweighs any single provision's shortcomings."

Market Outlook & Price Scenarios

Market structure presents two primary scenarios based on regulatory outcomes. Historical cycles suggest that clarity typically precedes institutional accumulation phases lasting 12-18 months.

• Bullish Invalidation Level: $95,000 resistance must break to confirm trend reversal. This level represents the previous liquidity grab zone and psychological resistance.
• Bearish Invalidation Level: $82,000 support must hold to maintain current structure. This represents the 0.618 Fibonacci retracement from the 2025 high and critical order block.

The 12-month institutional outlook depends heavily on regulatory clarity. If legislation passes as HSBC predicts, traditional finance could allocate 1-3% of AUM to digital assets within 24 months. This represents potential inflows exceeding $2 trillion based on current institutional holdings. The 5-year horizon suggests regulatory frameworks will mature similarly to commodities markets in the 1970s.