White House Official Predicts Bank Crypto Entry Under CLARITY Act

VADODARA, January 21, 2026 — David Sacks, the White House's head of AI and cryptocurrency, has forecast that U.S. banks will execute a full-scale entry into the virtual asset market if the Cryptocurrency Market Structure Act (CLARITY) passes into law, according to a report by SolidIntel. This statement, emerging amid a market gripped by extreme fear, represents a significant regulatory catalyst with profound implications for liquidity and market structure. The latest crypto news highlights a potential pivot point where institutional capital flows could redefine crypto's financial .

Market Context & Background

Market structure suggests that crypto has historically operated in a regulatory gray zone, limiting traditional financial institution participation. The CLARITY Act, a legislative proposal aimed at establishing clear federal oversight for digital assets, seeks to resolve this ambiguity. Underlying this trend is a decade-long push for regulatory clarity, mirroring the post-2017 ICO boom when calls for defined frameworks first gained traction. Consequently, banks have largely remained on the sidelines, citing compliance risks and uncertain capital requirements. The current extreme fear sentiment, with a Crypto Fear & Greed Index score of 24/100, contrasts sharply with this bullish regulatory development, indicating a disconnect between short-term price action and long-term structural shifts. Related developments include the SEC's recent appointment of Keith Cassidy as Examinations Director, which may influence enforcement priorities, and Treasury analysis on Supreme Court tariff rulings affecting broader economic policy.

What Happened?

On January 21, 2026, SolidIntel reported that David Sacks, in his capacity as White House AI and cryptocurrency head, predicted banks would enter the crypto market en masse upon CLARITY Act passage. The act, designed to create a comprehensive regulatory framework for digital assets, addresses key issues like custody, trading, and disclosure requirements. According to the report, Sacks emphasized that regulatory certainty is the primary barrier to institutional adoption. This prediction aligns with ongoing legislative efforts in Congress, where similar bills have been debated since 2023. The statement comes as Bitcoin trades at $88,702, down 2.32% over 24 hours, reflecting broader market stress despite the positive regulatory outlook.

Technical Analysis & Price Action

On-chain data indicates that Bitcoin's current price action is testing a critical liquidity zone near $88,000. The daily chart shows a Fair Value Gap (FVG) between $90,500 and $92,000, which remains unfilled and acts as a magnet for price. Volume profile analysis reveals high node concentration at $85,000, suggesting strong support. The Relative Strength Index (RSI) sits at 38, indicating oversold conditions but not yet extreme. A 50-day moving average at $91,200 provides dynamic resistance. Market structure suggests that a break above this level could trigger a short squeeze, while failure to hold support may lead to further downside. Bullish Invalidation is set at $85,000 (Fibonacci 0.618 retracement from the last swing high), where a breach would invalidate the current consolidation thesis. Bearish Invalidation lies at $95,000, a previous order block that must be reclaimed to confirm a trend reversal.

By The Numbers

Why It Matters

Institutional impact would be profound: bank entry under the CLARITY Act could inject trillions in capital, reshaping liquidity profiles and reducing retail-driven volatility. According to Federal Reserve data, U.S. banks manage approximately $20 trillion in assets, a fraction of which could significantly alter crypto market depth. Retail impact may include improved custody solutions and lower transaction costs, but also increased competition from sophisticated players. This shift mirrors traditional finance's evolution post-Dodd-Frank, where regulation spurred consolidation and efficiency. The act's focus on market structure, akin to securities laws, could legitimize crypto as an asset class, attracting pension funds and insurers. Consequently, price discovery may become more efficient, reducing the prevalence of gamma squeezes and liquidity grabs common in current markets.

Community Sentiment

Market analysts on X/Twitter are divided. Bulls argue that regulatory clarity is the final hurdle for mass adoption, citing Sacks' prediction as a validation of crypto's maturation. One commentator noted, "Banks waiting for CLARITY is like whales waiting for low fees—inevitable." Bears caution that bank entry could centralize control, undermining crypto's decentralized ethos. Sentiment analysis from social platforms shows a 60/40 split in favor of bullish outcomes, but with high uncertainty due to the extreme fear index. This dichotomy reflects the market's struggle to price in long-term structural benefits against short-term macroeconomic headwinds, such as those highlighted in reports of whale losses and short positions.

Price Prediction / Future Outlook

Bullish Case: If the CLARITY Act passes within 2026, banks begin onboarding in 2027, driving Bitcoin toward $120,000 as institutional demand meets limited supply. Market structure suggests a revaluation of altcoins with clear utility, like Ethereum post-EIP-4844, could outperform. Bullish invalidation: failure to hold $85,000 support. Bearish Case: Legislative delays or dilution of the act maintain regulatory uncertainty, prolonging bank hesitation. Bitcoin retests $75,000 as retail capitulation continues, exacerbated by macroeconomic pressures. Bearish invalidation: a sustained break above $95,000 order block. On-chain data indicates that accumulation by long-term holders is rising, supporting a gradual bullish bias over a 5-year horizon.