Bitwise: Crypto Market Can Keep Rising Without CLARITY Act
Bitwise Chief Investment Officer Matt Hougan has revised his own earlier read on how much the CLARITY Act actually matters to crypto’s next leg up, and his new position is notably more relaxed than the one he held just months ago. Following the bill’s failure in the U.S. Senate, Hougan is now arguing that its collapse may turn out to be far less consequential than current headlines suggest.
From Groundhog to Afterthought
Back in January, Hougan compared the CLARITY Act to Punxsutawney Phil, the groundhog whose shadow-sighting ritual is used, half-seriously, to predict how long winter will last in the U.S. The comparison was a way of describing how much weight markets and analysts were putting on a single legislative outcome as a signal for crypto’s broader trajectory: if the bill passed, that was read as good news confirming a favorable path forward; if it stalled, that risked being read as a bad omen regardless of what was actually happening elsewhere in the industry.
Nine months later, with the bill having failed a procedural cloture vote in the Senate, Hougan is walking that framing back directly. “I no longer think the previous scenario is the most likely one,” he wrote in a note to clients. “On the contrary, I think the CLARITY Act’s failure may prove to be far less significant than today’s headlines suggest.”
The Core Argument: Price Didn’t Follow the Bill’s Odds
Hougan’s case rests on a specific observed pattern rather than just a general shift in mood. If continued crypto market growth genuinely depended on the CLARITY Act passing, he argues, then a deterioration in the bill’s odds of passing should have been accompanied by a corresponding decline in bitcoin’s price. Instead, the two moved in opposite directions: as the bill’s prospects worsened over recent months, bitcoin’s price didn’t fall in tandem, and in some stretches moved higher even as the legislative odds soured.
That divergence is the crux of his revised thesis. A market that was genuinely pricing in the CLARITY Act as a load-bearing catalyst would show a tighter correlation between the bill’s odds and the asset’s price. The fact that bitcoin largely decoupled from the bill’s legislative fortunes suggests, in Hougan’s reading, that the market had already stopped treating the bill’s passage as a prerequisite for continued growth well before the actual Senate vote happened.
Wall Street Didn’t Wait for Congress Either
Hougan’s second pillar of evidence is behavioral rather than purely price-based: major financial institutions have been building real crypto and blockchain infrastructure throughout the period the CLARITY Act’s fate remained uncertain, rather than waiting on the sidelines for regulatory clarity before committing resources.
He pointed to three concrete examples. Robinhood Chain, the brokerage’s own blockchain, went live and has already processed billions of dollars in volume. Morgan Stanley launched a Solana-based ETF, a meaningful institutional embrace of a network beyond bitcoin and ether specifically. And the Depository Trust and Clearing Corporation, the backbone of U.S. securities settlement, completed its first settlements involving tokenized stocks, a genuinely significant infrastructure milestone for connecting traditional securities markets to blockchain rails.
In Hougan’s view, these moves reflect institutions betting on a generally favorable regulatory posture from the current leadership at the SEC and CFTC, rather than waiting for a specific piece of legislation to formally codify that posture into law first. If that read is right, it implies institutional crypto adoption has been proceeding on its own timeline, driven by regulator disposition and competitive pressure rather than strictly gated by congressional action.
Why This Reversal Matters
Hougan’s shift is notable partly because of who’s making it. As Bitwise’s chief investment officer, his firm-level commentary carries real weight with the institutional clients who read Bitwise’s research, and a visible walk-back of a previous framing is a more credible signal than if he’d simply stuck with a consistently bullish message regardless of what actually happened with the bill.
It’s also a useful data point on how quickly institutional crypto narratives can shift after a single event. The CLARITY Act’s failure in the Senate, on a 49-49 procedural vote that fell short of the 60 votes needed to proceed, initially triggered a real market reaction, bitcoin dropped toward the $75,000 level in the immediate aftermath. Hougan’s note, arriving shortly after that selloff, represents an attempt to reframe the setback for clients before the “regulatory failure equals bearish crypto” narrative fully sets in as the dominant read on what happened.
Not every analyst covering the vote’s aftermath shares Hougan’s relatively relaxed take. Some industry voices have pointed out that the bill’s failure pushes any resolution of U.S. market structure legislation into the next Congress, given how compressed the legislative calendar is ahead of the November elections, a genuinely longer runway of regulatory uncertainty than markets may currently be pricing. Others have echoed Hougan’s framing more directly, arguing that previous all-time highs were reached without the CLARITY Act in place at all, and that the market fundamentally moves on the underlying balance of supply and demand rather than on any single piece of pending legislation.
The Takeaway
Hougan’s revised position doesn’t argue that regulatory clarity is irrelevant to crypto’s long-term trajectory, only that its near-term absence may matter less than the bill’s failure headlines suggest, based on how price has actually behaved relative to the bill’s changing odds over recent months. Whether that read holds up will become clearer over the coming weeks, as markets continue digesting both the Senate’s procedural failure and whatever comes next in Wall Street’s continued, seemingly bill-independent build-out of crypto infrastructure.