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Bitwise Chief Investment Officer Matt Hougan on Wednesday walked back his bearish CLARITY Act call, telling clients the bill’s failure may matter far less than the headlines suggest.
Bitcoin’s Rally Weakens the Bearish CLARITY Act Case
Hougan wrote in a note to clients that he previously predicted six more weeks of difficult markets if the bill failed.
One data point changed his view: Bitcoin(CRYPTO: BTC) climbed from roughly $57,950 on July 1 to above $80,000 by Sept. 4, while Polymarket odds of the CLARITY Act passing fell from 39% to 18% over the exact same stretch.
“If the bull market depended on CLARITY’s passage, you would have expected falling odds to mean falling prices,” Hougan wrote. “We got the opposite.”
Why Wall Street Never Waited
Hougan pointed out that major institutions kept building through the entire legislative uncertainty. Robinhood(NASDAQ:HOOD) launched its own blockchain, Morgan Stanley(NYSE:MS) launched a Solana(CRYPTO: SOL) ETF, and the DTCC settled its first batch of tokenized stock trades, all without a single vote from Congress.
His explanation: firms already had confidence in a pro-crypto SEC and CFTC locked in until 2029.
SEC Chair Paul Atkinstold CNBC in July the agency is “ready, willing, and able to come out with rules that address the same issues as Clarity,” and followed through with the proposed Regulation Crypto Assets in August.
Meanwhile, CFTC Chair Mike Selig doubled down Wednesday morning, saying the agency is “locked in and ready to ship its rules for the new frontier of finance.”
Reversible Agency Rules Remain the Main Regulatory Risk
Hougan was not dismissing the failure entirely. Agency rules can be reversed by a future administration, and only Congress can give the CFTC direct authority over crypto spot markets.
Legislative clarity would have been more durable. Bitcoin fell roughly 4% following Tuesday’s vote, with Hougan citing interest rates and oil prices as contributing factors alongside the news.
What This Means Going Forward
Hougan’s overall framing is that crypto sits in a “heads we win big, tails we still win” regulatory setup.
The current market weakness likely persists until Atkins and Selig announce their next rulemaking proposals, at which point attention shifts back to institutional adoption.
“The bull market ahead of us has a few more speed bumps,” Hougan wrote, while arguing the destination has not changed.
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