Bitwise CIO Matt Hougan changed his view after the Senate failed to advance the CLARITY Act. He now sees the setback as temporary rather than a threat to the crypto rally. His revised case rests on market strength, institutional activity, and federal rulemaking.
Bitcoin Supports Hougan After CLARITY Act Setback
Bitcoin became the main evidence behind Hougan’s change because its rally continued while passage expectations weakened. Bitwise data shows Bitcoin bottomed near $57,950 on July 1 and later moved above $80,000 on September 4. Meanwhile, Polymarket odds for 2026 passage fell from 39% to 18% during the same period.
That divergence weakened Hougan’s earlier argument that failed legislation could stall the crypto bull cycle. He had previously linked regulatory progress with stronger market confidence and warned that declining passage odds could pressure prices. However, Bitcoin advanced for much of the period even as the bill’s political path deteriorated.
The Senate rejected cloture on September 15 by a 49-50 vote, well below the required 60 votes. Bitcoin then fell about 4% as markets absorbed the failed vote and wider concerns around rates and oil. Still, Hougan now argues that congressional action is not the only path supporting continued crypto development.
Ethereum Focus Shifts Toward SEC and CFTC Rulemaking
Ethereum also weakened after the Senate vote, but federal agencies quickly remained active on crypto market rules. SEC Chair Paul Atkins had already said his agency could address major CLARITY Act issues through existing rulemaking authority. The SEC then continued Project Crypto and advanced measures aimed at moving more financial activity onto blockchain networks.
The agency issued a temporary innovation exemption on September 17 for certain tokenized stock trading venues. That action allows limited onchain trading under defined conditions while the SEC considers longer-term rules. The move supports Hougan’s argument that regulatory work can continue even when comprehensive legislation stalls.
The CFTC has also expanded its crypto work under Chair Michael Selig and its broader innovation agenda. On September 17, staff extended no-action relief covering certain passive software providers involved with regulated trading access. Hougan therefore expects agency proposals to become the next major regulatory catalysts for Ethereum and the broader market.
XRP Selloff Shows Policy Risk Remains
XRP recorded a sharper reaction than Bitcoin after the failed Senate vote, showing that policy risk still affects altcoins. Reports placed XRP near $1.29 after the decision, while the broader crypto market faced heavy leveraged liquidations. The reaction showed that congressional setbacks can still trigger fast repricing even when longer-term regulation continues elsewhere.
However, Hougan’s updated thesis separates short-term volatility from the broader direction of crypto policy and adoption. His view now gives more weight to regulatory agencies and financial firms already building blockchain products. Bitwise cited Robinhood, Morgan Stanley, and DTCC as examples of firms expanding crypto activity before legislative certainty arrived.
The CLARITY Act remains stalled, and agency rules carry less permanence than legislation passed by Congress. Future administrations can revise regulations, while Congress can create more durable authority and market structure. For now, Hougan sees written SEC and CFTC proposals as the next key signals for Bitcoin, Ethereum, and XRP.
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