Crypto Can Survive CLARITY Failure, But Not the Wait: Bitwise CIO
Bitwise Chief Investment Officer Matt Hougan says the CLARITY Act’s destiny issues lower than ending the uncertainty round it. He argues that crypto can survive the invoice failing, however can not thrive in regulatory limbo.
Hougan made the case in his CIO memo, written as main crypto belongings commerce sharply decrease and the invoice awaits a full Senate vote.
Why CLARITY Act Uncertainty Keeps Institutions Sidelined
The legislation would draw a transparent line between SEC and CFTC jurisdiction and change enforcement-led oversight with a statutory framework. The House handed it 294-134 in July 2025, with 78 Democrats in favor.
Senate Banking Chairman Tim Scott then steered the invoice by means of a 15-9 committee vote on May 14, capping practically a yr of bipartisan talks. Committee Republicans body it as delivering clear guidelines and stronger investor protections.
However, the ground math is more durable. Republicans maintain 53 Senate seats, and passage requires 60 votes, but solely two committee Democrats backed the invoice. Remaining Senate floor hurdles vary from DeFi remedy to stablecoin guidelines.
That rigidity explains the odds hole. Polymarket merchants worth year-end approval at 51%, Hougan famous in the memo. Meanwhile, his personal Washington contacts place the possibilities between 5% and 30%.
This uncertainty retains institutional capital on the sidelines. Investors should buy AI shares at document highs as an alternative of risking a regulatory setback inside months, he wrote.
“Crypto can survive CLARITY failing or rally if the invoice passes. But it might probably’t thrive in the in-between,” Hougan said in the memo.
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Crypto Builds While Washington Stalls
Hougan describes a market shifting from momentum commerce to contrarian wager. Instead of chasing hype, buyers more and more reward protocols like Hyperliquid that generate actual income.
Bitcoin (BTC) has fallen 21% this yr, whereas Ethereum (ETH) and Solana (SOL) are down 33% and 37%, per the memo. Crypto ETFs additionally face outflows, and spot buying and selling volumes sit at multi-year lows.
In distinction, Hyperliquid (HYPE) gained 72% in a month, and Zcash (ZEC) rose 50%. Neither rally tracked the macro names, a divergence Hougan attributes to idiosyncratic fundamentals.
Hougan reads that rotation as proof that the crypto winter may end prior to many count on. Green returns constructed on actual development, he argued, sign a altering season.
He has additionally stated the CLARITY Act may reshape crypto asset valuations as soon as it passes.
Still, he expects no sustainable large-cap rally earlier than Congress settles the query.
The Senate’s subsequent scheduling selections could subsequently matter extra to costs than the remaining vote itself.
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