Bitwise Chief Investment Officer Matt Hougan said the CLARITY Act may not make it through the US Senate before lawmakers leave for the August recess, but argued that a miss this week would not end either the bill or broader progress on crypto regulation.
According to Hougan, Senate timing is tight: senators would need to file for cloture by August 5 for the measure to have a chance of reaching a vote before the chamber departs on August 7 and returns on September 14. If that does not happen, he expects the legislation to remain alive, though in a weakened and uncertain state.
A narrow window before recess
Hougan said failure to advance the bill this week would most likely push it into what he described as a “walking dead” phase rather than kill it outright. In that scenario, supporters could try again when the Senate returns in September or seek to attach it to a December lame-duck omnibus package, a common year-end route for measures that have not cleared on their own.
That possibility matters because the timing of CLARITY has become part of the market story. Hougan said some professional investors are staying cautious while they wait for a clearer outcome, preferring not to commit capital until they know whether the legislation moves forward and how markets digest the result.
Uncertainty, odds, and market reaction
Hougan suggested that even a short-term setback could reduce one source of hesitation. If the bill does not pass this week, he said a steep drop in its odds on Polymarket could at least resolve the immediate question hanging over the market.
In his view, crypto prices could wobble at first, but a clearer answer on the bill’s near-term prospects might ultimately leave the sector in a better position for a rally later in the fall. That remains a market interpretation rather than a confirmed outcome, but it reflects his broader argument that uncertainty itself is weighing on sentiment.
SEC rulemaking as an alternate path
Hougan also pointed to the Securities and Exchange Commission as another avenue for action. He noted that SEC Chair Paul Atkins recently said the agency is ready and able to adopt rules covering many of the same issues addressed by CLARITY.
Hougan said SEC rules could prove more supportive of crypto and innovation in the near term than a bipartisan congressional compromise. The trade-off, he argued, is durability: administrative rules can be revisited by a future administration, and a less supportive SEC chair could reverse course more easily than Congress could undo statute.
Why Hougan says momentum would continue
Even with that risk, Hougan argued that crypto has built too much institutional momentum to be stopped by one missed legislative deadline. He cited BlackRock’s Bitcoin ETF, tokenization efforts at Nasdaq and JPMorgan, and stablecoin-related work involving Visa, Mastercard, Stripe and Coinbase. He also referenced Robinhood’s blockchain and its links to decentralized finance applications such as Uniswap and Morpho.
He added that crypto firms are gaining a firmer foothold in US banking. The Office of the Comptroller of the Currency has granted trust charters to Circle, Ripple, Paxos and others, while governments in the European Union, Japan and Russia are also pursuing pro-crypto legislation. Hougan compared the current moment to the early internet era, when Congress failed to pass major telecom reform in 1994 but the sector kept expanding before the Telecommunications Act of 1996 eventually arrived.
Broader industry case for CLARITY
Other industry figures have made a separate case for why the bill still matters. Andreessen Horowitz partner Chris Dixon recently said CLARITY could help prevent another FTX-style failure by giving regulators clearer authority over crypto exchanges and by setting rules around disclosure, fraud and insider trading.
Dixon said the part of the market outside stablecoins, which he estimated at roughly 85% of the sector, still lacks a comprehensive federal framework. He added that while the SEC and CFTC can address many issues on their own, legislation would provide more durable rules and greater confidence for banks, fintech groups and other companies making long-term blockchain investments. The next confirmed checkpoint is whether the Senate can still move before recess; if not, attention would shift to September or a year-end package.
Source: cryptopotato.com