Bitwise Chief Investment Officer Matt Hougan has softened his earlier concerns about the failure of the CLARITY Act, arguing that the setback may slow the crypto market rather than stop its broader recovery.<\/p>\n\n\n\n
His revised view comes after Bitcoin climbed from around $57,950 in early July to above $80,000 in early September, even as expectations for the legislation to pass continued to fall. Following the Senate’s failed procedural vote on September 15, Bitcoin pulled back toward the $76,000 area, but Hougan now sees the legislative setback as less damaging than he initially expected.<\/p>\n\n\n\n
Hougan previously believed that failure to pass the CLARITY Act could lead to another extended period of weakness across the crypto market.<\/p>\n\n\n\n
However, Bitcoin’s recent performance caused him to reconsider that view.<\/p>\n\n\n\n
According to Bitwise data, Bitcoin traded near $57,950 on July 1 before climbing above $80,000 on September 4. During the same period, market expectations for the CLARITY Act becoming law in 2026 reportedly fell from 39% to 18%.<\/p>\n\n\n\n
That divergence became an important part of Hougan’s updated outlook.<\/p>\n\n\n\n
Bitcoin continued to rally even as confidence in the legislation declined, weakening the argument that passage of the bill was essential for the market’s recovery.<\/p>\n\n\n\n
Still, the price move does not prove that lower expectations surrounding the legislation caused Bitcoin’s rally. Bitwise also did not present the relationship as evidence of future price performance.<\/p>\n\n\n\n
The Senate failed to invoke cloture on H.R. 3633 on September 15.<\/p>\n\n\n\n
The official vote ended 49 in favor and 50 against, with one senator not voting. Sixty votes were required to move the legislation toward debate.<\/p>\n\n\n\n
Importantly, this was not a final vote on whether the bill should become law.<\/p>\n\n\n\n
The failed procedural vote prevented the Senate from opening debate at that stage, but the legislation itself remains unresolved.<\/p>\n\n\n\n
No date has been announced for another Senate vote.<\/p>\n\n\n\n
Hougan now describes the setback as a temporary obstacle rather than a fundamental threat to the industry’s development.<\/p>\n\n\n\n
One of the main reasons behind Hougan’s revised outlook is continued institutional activity in the crypto sector.<\/p>\n\n\n\n
He pointed to several major financial companies that have moved forward with blockchain and digital asset products even without comprehensive crypto market-structure legislation.<\/p>\n\n\n\n
Robinhood launched the public mainnet of Robinhood Chain in July.<\/p>\n\n\n\n
The network is designed as an Ethereum-compatible Layer 2 focused on financial services and tokenized assets.<\/p>\n\n\n\n
Robinhood also introduced stock tokens for eligible users in more than 120 countries, with around 200 stock tokens reportedly available by September.<\/p>\n\n\n\n
Morgan Stanley also expanded its crypto offerings.<\/p>\n\n\n\n
The Morgan Stanley Solana Trust became effective with the SEC in July, and the company later launched both Solana and Ether exchange-traded products on NYSE Arca.<\/p>\n\n\n\n
The products charge a 0.14% sponsor fee and include staking within their investment structures.<\/p>\n\n\n\n
Institutional tokenization has also continued.<\/p>\n\n\n\n
In July, the Depository Trust & Clearing Corporation processed live production transactions using tokenized securities.<\/p>\n\n\n\n
The activity included equity trades, U.S. Treasury transactions, repo activity, securities lending, collateral pledges and token transfers.<\/p>\n\n\n\n
Around 40 firms participated in the production event, according to DTCC.<\/p>\n\n\n\n
These developments support Hougan’s view that major financial institutions are not waiting for Congress before moving deeper into digital assets.<\/p>\n\n\n\n
Another major part of Hougan’s argument is that U.S. regulators can continue developing crypto rules even without the CLARITY Act.<\/p>\n\n\n\n
The Securities and Exchange Commission and Commodity Futures Trading Commission already have authority to introduce certain regulations within their existing mandates.<\/p>\n\n\n\n
SEC Chairman Paul Atkins has said legislation from Congress would still be preferable because agency rules can later be changed or reversed.<\/p>\n\n\n\n
However, the SEC has already started moving forward with its own crypto rulemaking.<\/p>\n\n\n\n
Its proposed Regulation Crypto Assets would establish tailored exemptions for certain crypto-related investment-contract offerings and introduce a conditional safe harbor for determining when a crypto asset may no longer be tied to an investment contract.<\/p>\n\n\n\n
The proposal remains open for public comment through October 20 and is not yet a final rule.<\/p>\n\n\n\n
CFTC Chairman Michael Selig has also indicated that the agency plans to continue developing digital asset rules using its existing statutory authority.<\/p>\n\n\n\n
The CFTC created an Innovation Task Force earlier in the year to focus on crypto assets, blockchain, artificial intelligence and prediction markets.<\/p>\n\n\n\n
However, regulators still face limits.<\/p>\n\n\n\n
Only Congress can provide the CFTC with the broader spot-market authority envisioned under the CLARITY Act.<\/p>\n\n\n\n
Agency rules can also face legal challenges or be reversed by future leadership, meaning legislation would provide a stronger and more permanent regulatory framework.<\/p>\n\n\n\n
Crypto markets reacted negatively following the Senate’s failed vote.<\/p>\n\n\n\n
Bitcoin dropped roughly 4% to around $75,908, while shares of major crypto-related companies also came under pressure.<\/p>\n\n\n\n
Derivatives markets experienced significant liquidations during the decline.<\/p>\n\n\n\n
Crypto exchanges reportedly liquidated about $571 million in long positions over a 24-hour period, including roughly $190 million each in Bitcoin and Ether longs.<\/p>\n\n\n\n
Hougan noted that the legislative setback was not the only issue affecting crypto prices.<\/p>\n\n\n\n
Concerns surrounding interest rates and oil prices also contributed to market uncertainty.<\/p>\n\n\n\n
The macroeconomic environment became more challenging on September 16 when the Federal Reserve raised its benchmark interest rate to a range of 3.75%\u20134.00%.<\/p>\n\n\n\n
It marked the Fed’s first rate increase since 2023.<\/p>\n\n\n\n
Policymakers were responding to persistent inflation and higher energy costs, with most officials expecting at least one additional rate increase before the end of 2026.<\/p>\n\n\n\n
Higher interest rates can create pressure on risk assets because investors may shift toward cash and fixed-income investments offering improved returns.<\/p>\n\n\n\n
Despite those pressures, Bitcoin remained substantially above its July level.<\/p>\n\n\n\n
By September 17, Bitcoin was trading near $76,274, up around 0.5% over 24 hours but down approximately 2.1% over seven days.<\/p>\n\n\n\n
The price was still well above the $57,950 level referenced by Bitwise, though below its early-September peak above $80,000.<\/p>\n\n\n\n
Hougan’s revised outlook suggests Bitwise no longer sees the failure to advance the CLARITY Act as an immediate threat to the broader crypto recovery.<\/p>\n\n\n\n
Continued institutional adoption, ongoing SEC and CFTC rulemaking, and Bitcoin’s resilience during declining expectations for the legislation have contributed to that change in view.<\/p>\n\n\n\n
However, uncertainty remains.<\/p>\n\n\n\n
The Senate has not scheduled another cloture vote on H.R. 3633, while the SEC’s Regulation Crypto Assets proposal is still going through the public comment process.<\/p>\n\n\n\n
Hougan’s expectation that the crypto bull market can continue is therefore still an investment outlook rather than a guaranteed market outcome.<\/p>\n\n\n\n
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Bitwise Chief Investment Officer Matt Hougan has softened his earlier concerns about the failure of the CLARITY Act, arguing that the setback may slow the crypto market rather than stop its broader recovery. His revised view comes after Bitcoin climbed from around $57,950 in early July to above $80,000 in early September, even as expectations…<\/p>\n","protected":false},"author":3,"featured_media":16641,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63,70],"tags":[384,2086,2389],"class_list":["post-16640","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","category-finance","tag-bitwise","tag-clarity-act","tag-crypto-outlook"],"yoast_head":"\n