Bitwise CIO Matt Hougan says if the CLARITY Act does not pass, crypto faces a three-year proving period before prices see any real momentum. Without legislation locking in today’s pro-crypto rules, a future administration could reverse everything.
He wrote, “To imagine what’s at stake, picture Senator Elizabeth Warren as the next chair of the SEC.”
Prediction markets reflect the growing uncertainty. In early January, Polymarket placed the odds of the CLARITY Act passing at 80%. After Coinbase CEO Brian Armstrong called the current version of the bill “unworkable,” those odds have dropped to around 55%.
Two Paths for the Market
Hougan laid out what happens next depending on whether the bill passes.
If a version the crypto industry supports gets through, he expects the market to “rally sharply.” Investors would start pricing in future growth from stablecoins and tokenization right away.
If it fails, crypto enters what Hougan calls a “show me” period. The industry would have three years to make crypto essential to everyday Americans and traditional finance. He compared it to how Uber and Airbnb operated in legal gray areas until they became too popular for regulators to shut down.
“Without that real-world adoption, crypto will be built on a regulatory foundation of sand,” Hougan wrote.
Also Read: Bitwise CIO Matt Hougan Says 100+ Crypto ETFs “Palooza” Is Coming
Gold’s Run Shows Why Crypto Matters
Hougan tied this to gold’s historic surge. After gaining 65% in 2025, gold is up another 16% in 2026 and now trades above $5,000. Half of gold’s value in dollar terms has come in just the last 20 months.
Central banks doubled their gold purchases after the U.S. seized Russian treasury assets in 2022. German economists are now pushing their government to pull gold reserves out of the New York Federal Reserve. Norway’s sovereign wealth fund just received a formal warning about potential confiscation risks.
Hougan sees this as validation for crypto. In a world where trust in institutions is falling, assets that do not rely on centralized control become more valuable.
Where the Bill Stands
The House passed the CLARITY Act in July 2025 with bipartisan support. It now sits with the Senate Banking Committee, where debates over stablecoin yields and investor protections have slowed progress.
Hougan said he remains optimistic since the administration has delivered on its crypto promises so far. But he added, “If it doesn’t pass, I think we need to prepare for a slower ascent.”
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