Bitwise CIO Says Crypto Bull Market Can Continue Without Clarity Act

Bitwise Chief Investment Officer Matt Hougan has walked back his earlier warning that the Clarity Act’s failure would trigger weeks of difficult crypto markets, now arguing the bill’s collapse may matter far less than headlines suggest.

Hougan Reverses His Earlier Prediction

The Clarity Act fell short in Tuesday’s Senate procedural vote, receiving only 49 of the 60 votes needed to advance. Hougan had previously compared the legislation to crypto’s own version of Punxsutawney Phil, predicting six more weeks of market winter if it failed. In a note to clients Wednesday night, he said he no longer sees that as the most likely outcome.

He pointed to Bitcoin’s rally since bottoming near $57,950 on July 1, climbing above $80,000 by September 4, even as Polymarket’s odds of the Clarity Act passing this year fell from 39% to just 14% over that same stretch. Hougan argued that if the bull market truly depended on the bill passing, falling odds should have meant falling prices, but the opposite happened.

Wall Street Moves Ahead Without Waiting for Congress

Hougan noted that major firms have kept expanding their crypto operations regardless of the legislation’s fate, pointing to Robinhood launching its own blockchain, Morgan Stanley rolling out a Solana ETF, and DTCC settling its first tokenized stock trades. He said these companies have taken comfort in having a strongly pro-crypto SEC and CFTC in place through 2029, with both regulators already signaling plans to advance their own rulemaking.

SEC Chair Paul Atkins and CFTC Chair Mike Selig have both said their agencies are prepared to tackle issues the Clarity Act would have addressed. Still, Hougan acknowledged limits to that approach, noting agency rules can be undone by a future administration and that only Congress can grant the CFTC broader authority over spot crypto markets.

Bitcoin fell about 4% following the news, which Hougan attributed partly to concerns over interest rates and oil prices, adding that the bull market ahead still has a few more speed bumps to clear.