Bitwise Chief Investment Officer Matt Hougan says the crypto industry can continue expanding even if the U.S. Senate fails to advance the CLARITY Act before its August recess. In an August 4 client memo, he described the bill as likely to enter a “walking dead” phase if the current window closes, remaining available for a later vote or possible year-end legislative package. His central argument is that congressional delay would create uncertainty without reversing crypto’s institutional momentum.
The legislation has already cleared the Senate Banking Committee, which approved H.R. 3633 by a 15-9 vote on May 14 and sent it to the full chamber. The proposal would establish a federal market-structure framework covering regulator jurisdiction, digital commodities, fundraising, decentralized finance and tokenized securities. A pre-recess breakthrough remains procedurally difficult, with no publicly confirmed cloture filing as of late Wednesday afternoon and unresolved disputes over ethics and stablecoin rewards.
Agency Action Offers a Regulatory Fallback
Hougan’s fallback case begins with the regulatory framework issued in March by the Securities and Exchange Commission, accompanied by Commodity Futures Trading Commission guidance. The interpretation created a token taxonomy and addressed how federal securities law applies to activities including staking, mining, airdrops and wrapped assets. That agency action provides guidance, but it does not deliver the permanence or full statutory architecture of legislation.
SEC Chair Paul Atkins has also said the commission is prepared to issue rules addressing many of the same subjects if Congress does not act. Hougan views that option as sufficient to support continued development for roughly two and a half years, until a future administration could potentially appoint different leadership. The weakness of an agency-led solution is reversibility, because later commissioners could modify or replace rules more easily than Congress could repeal a statute.
The CLARITY Act still matters to institutional participants seeking durable legal boundaries. The bill would clarify SEC and CFTC jurisdiction while establishing rules for stablecoin rewards, anti-money-laundering obligations, decentralized platforms and tokenized securities. Legislative certainty could reduce long-term policy risk, particularly for companies making large investments in custody, trading, tokenization and payment infrastructure.
Political Delay Does Not Equal Industry Reversal
Hougan argues that crypto is already too integrated into mainstream finance to be pushed back to its earlier position. He pointed to Bitcoin exchange-traded products, tokenization initiatives from major financial firms and stablecoin payment development as evidence that institutions are building beyond short-term legislative cycles. This is Bitwise’s strategic assessment rather than proof that every project will achieve commercial adoption.
The bill’s path remains constrained by disputes that extend beyond regulator jurisdiction. Banks have pressed lawmakers to restrict stablecoin rewards that they say could draw deposits from the insured banking system, while crypto companies argue that broad restrictions would reduce competition. Democrats have also sought stronger ethics and anti-money-laundering provisions. Those conflicts make a late legislative compromise harder, even after the committee’s bipartisan vote.
For Hougan, failure to move the bill now would delay a preferred framework rather than invalidate the sector. A later standalone vote, a year-end package or SEC rulemaking could all keep the regulatory process moving. The decisive question is whether institutional activity can continue outpacing political uncertainty, which remains the foundation of Bitwise’s claim that crypto will reshape finance regardless of this week’s Senate outcome.
