Bitwise CIO: CLARITY Act fate less important than ending regulatory uncertainty
Bitwise Chief Investment Officer Matt Hougan argues that the CLARITY Act's passage is less critical than resolving the regulatory uncertainty surrounding it. In his CIO memo, Hougan states that crypto can survive the bill's failure but cannot thrive in limbo. The legislation, which would clarify SEC vs. CFTC jurisdiction, passed the House 294-134 in July 2025 and cleared Senate Banking Committee 15-9 on May 14, but faces a 60-vote threshold in the full Senate. Polymarket traders peg year-end approval at 51%, while Hougan's Washington contacts estimate 5%-30%. This uncertainty keeps institutional capital on the sidelines, with investors preferring AI stocks. Bitcoin is down 21% YTD, Ethereum 33%, Solana 37%. However, Hougan notes a shift from momentum to contrarian plays, with protocols like Hyperliquid (up 72% in a month) and Zcash (up 50%) showing strong fundamentals. He expects no sustainable large-cap rally until Congress resolves the regulatory framework, making Senate scheduling decisions critical for market prices.
Key facts
- Hougan: Crypto can survive CLARITY failing but not regulatory limbo.
- CLARITY Act passed House 294-134, Senate committee 15-9; needs 60 Senate votes.
- Polymarket odds 51%, Hougan's sources estimate 5%-30%.
- Bitcoin -21%, Ethereum -33%, Solana -37% YTD; institutional capital sidelined.
- Hyperliquid +72%, Zcash +50% in month; shift to fundamentals-based plays.