Bitwise CIO: Crypto Growth Unlikely to Halt Despite CLARITY Act Delays

Bitwise’s top strategist says crypto can keep growing even if Congress stalls the CLARITY Act. In an investor memo on Aug. 4, Bitwise Chief Investment Officer Matt Hougan argued that the crypto industry won’t collapse if the Senate fails to advance H.R. 3633 before its August recess. “Crypto will be fine,” he wrote, pointing to two backup paths: SEC rulemaking and continued adoption of digital assets by traditional financial firms. Hougan emphasized this is a forward-looking industry view, not a guarantee of how regulators will act. Where the CLARITY Act stands - The bill’s immediate prospects looked weak on Aug. 4. The Senate floor schedule did not include H.R. 3633, and the official list of pending cloture motions referenced other matters. By the end of that day no cloture filing for the CLARITY Act had been announced. - Hougan identified Aug. 5 as the practical deadline for Senate leaders to file cloture to preserve a possible Friday procedural vote. Under Senate Rule XXII, a cloture motion requires 16 senators to sign and—if filed—triggers a timed cloture vote one day and one hour after the Senate next convenes. Ending debate normally requires 60 votes, unless senators agree by unanimous consent. - The bill cleared the Senate Banking Committee 15–9 on May 14 and Senator Cynthia Lummis later released a merged 616‑page text combining Banking and Agriculture committee work. That version remains on the Senate legislative calendar but has not received a full-chamber vote. Why Hougan thinks the industry can adapt Hougan’s “fallback” rests on comments from SEC Chair Paul Atkins, who said the agency is “ready, willing, and able” to address many issues the CLARITY Act targets. Hougan suggested SEC rules adopted under Atkins’ approach could initially be friendlier to innovation than the compromises needed to secure bipartisan passage—possibly even acting as an “accelerant.” But he acknowledged that outcome isn’t guaranteed. Limits of SEC action vs. legislation - The SEC can change securities rules, registered-intermediary requirements and token-offering regimes within its existing authority. It cannot, however, unilaterally give the CFTC nationwide authority over digital-commodity spot markets—a key structural element in the CLARITY Act. - Agency rules are also more vulnerable over time: a future commission could revise or rescind them through another rulemaking. By contrast, a federal statute would be far tougher to change without new congressional action. Political and policy hurdles that remain Several substantive policy disputes would not be solved by SEC rulemaking alone. The merged bill covers token disclosures, digital commodity exchanges, customer property, DeFi, stablecoin rewards, AML rules and jurisdictional splits between SEC and CFTC. But senators and industry groups are still sparring over issues including: - Ethics and disclosure: Seven Democratic senators (Catherine Cortez Masto, Angela Alsobrooks, Cory Booker, Ruben Gallego, John Hickenlooper, Mark Warner and Raphael Warnock) said the Republican text “falls short,” pushing for stronger rules around elected officials, consumer protection, illicit finance, conflicts of interest and market integrity. - Stablecoin rewards: Banks want tighter restrictions on rewards tied to payment-stablecoin balances, arguing some exceptions could function like deposit interest and drain lending capacity. - Prediction markets and tribal gaming: Twelve senators asked leaders to block CFTC-registered platforms from listing contracts that look like sports bets or casino games and sought protections for state authority and tribal sovereignty. All of these fault lines make reaching 60 votes harder and illustrate why SEC rulemaking won’t answer every question. CFTC jurisdiction, banking law, political ethics and tribal gaming each implicate broader federal authority or separate legislation. Timing and odds The Senate calendar places lawmakers in a district work period Aug. 10–Sept. 11. If leaders don’t press the bill this week, Hougan warned the measure could enter a “walking dead” phase—still alive on the calendar but with little realistic path to passage until September or potentially tucked into a year-end package. Prediction markets reflect that uncertainty: Polymarket prices gave the CLARITY Act a roughly 23% chance of becoming law by Dec. 31 (down from 27% when Hougan published his memo), with about $3.9 million in trading volume. Next concrete step A cloture filing would be the next tangible development; without it, ordinary Senate procedure leaves almost no route to a pre-recess floor vote. Even if Congress pauses, the industry may get narrower SEC rules in the near term—but the long-term allocation of U.S. digital-asset oversight would remain unsettled.