Why Bitwise Says CLARITY Act Passage Marks the Bear Market Bottom
Bitwise named the CLARITY Act as certainly one of the key catalysts for crypto markets in the third quarter, saying its passage might possible mark the backside of the present bear market.
The asset supervisor laid out 4 catalysts in its Q3 2026 report. It added that this quarter is make-or-break for the market construction invoice.
Why the CLARITY Act Tops Bitwise’s Q3 List
The CLARITY Act has been certainly one of the most-watched payments for the crypto sector. However, it has confronted key hurdles, with two issues now stalling its progress.
First, ethics provisions tied to the president’s household’s crypto pursuits have grow to be a sticking level. Section 604, which shields non-custodial developers from money transmitter guidelines, has additionally drawn contested debate amongst lawmakers and legislation enforcement teams.
Prediction markets put the odds of the invoice passing in 2026 close to 40%. That determine has fallen sharply from 75% in mid-May.
Nonetheless, Bitwise stays cautiously optimistic about the invoice’s probabilities. It mentioned a profitable vote would possible mark the backside of this bear market. According to the agency, a failure would deliver early volatility.
“If it passes, we imagine it possible marks this bear market’s backside. If it fails, anticipate volatility initially, then a clearing of uncertainty as the business retains constructing underneath a pro-crypto SEC and CFTC,” the statement learn.
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The Other Q3 Crypto Market Catalysts on Bitwise’s Radar
In addition to the CLARITY Act, the asset supervisor outlined three extra upcoming catalysts. Stablecoins sit second on the checklist. Regulators are as a consequence of finalize GENIUS Act rules this quarter, forward of the legislation taking impact in January 2027.
Bitwise expects extra giant companies to announce stablecoin initiatives earlier than go-live. It pointed to OpenUSD, backed by Stripe, BlackRock, Visa, Coinbase, and about 140 different companies.
“Stablecoin provide has held close to $300 billion since final fall, a quiet present of resilience via crypto’s selloff. We see accelerating stablecoin progress as a catalyst for chains like Ethereum and Solana in Q3, as consideration builds forward of January’s efficient date,” it added.
The agency additionally flagged the new Federal Reserve under Chair Kevin Warsh, whose method stays largely unknown to markets. He has held charges regular to date. Bitwise expects a a lot clearer learn on his Fed by the finish of the quarter. The course of charges continues to be onerous to name. However, the agency famous that the Fed shapes sentiment throughout all danger property, so any price determination might transfer markets.
Finally, Bitwise highlighted a quiet re-rating in Decentralized Finance (DeFi). In the previous month, Bitcoin (BTC) fell about 22%, but the agency’s DeFi index dropped simply 4%.
“DeFi often swings a lot more durable than Bitcoin, so holding up this properly is uncommon, and virtually nobody is speaking about it. We suppose DeFi is quietly re-rating,” the report learn. “We anticipate DeFi’s outperformance to maintain taking part in out in Q3, the form of shift the market tends to note late.”
Bitwise’s outlook follows a punishing Q2, crypto’s third straight quarter of losses and its worst run since 2022. How the present quarter progresses will present whether or not that streak extends or breaks.
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