Bitwise CIO Reverses Prediction: Clarity Act Failure Won't Spark Weeks of Tough Crypto Markets

Matt Hougan, CIO of Bitwise Asset Management, has revised his stance on the impact of the Clarity Act's failure on cryptocurrency markets.

The executive had previously compared the legislation to 'Punxsutawney Phil,' anticipating six more weeks of bear market if the bill failed to advance. However, in a note sent to his clients, Hougan acknowledged that this is no longer the most likely trajectory.

Hougan pointed out that Bitcoin's price actually rose from $57,950 on July 1 to above $80,000 on September 4, despite the odds of the Clarity Act becoming law falling from 39% to 14% during the same period. He noted that this contradicts the expectation that falling odds would imply falling prices.

The CIO also highlighted that major Wall Street firms continued expanding their crypto businesses without waiting for the legislation to pass, citing the launch of Robinhood's blockchain and Morgan Stanley's Solana ETF as examples. Hougan attributed this confidence to the fact that the SEC and CFTC are prepared to address the issues covered by the Clarity Act through their own rulemaking.

However, Hougan acknowledged the limitations of this path, stating that agency rules can be reversed with a change in administration and that Congress is still necessary for broader regulatory certainty.