Senate Rejection Spurs Crypto Market Gains

Bitwise Chief Investment Officer Matt Hougan believes that the failure of the CLARITY Act in the Senate has benefited the crypto market. The bill, which aimed to provide clarity and regulation for the industry, was rejected with a tie vote on September 15.

The rejection led many to expect a decline in market gains made before the vote. However, Bitcoin (BTC) has risen nearly 11% since then, while Ethereum (ETH) has gained roughly 12%. Some smaller tokens have also seen significant increases.

Hougan argues that the industry avoided compromises in the bill that would have limited certain aspects of the market. For example, the final text of the CLARITY Act would have barred platforms from paying interest or rewards on stablecoin balances, with penalties of up to $5 million per violation.

However, because the bill failed, the GENIUS Act remains in effect, which restricts only stablecoin issuers from paying interest, not exchanges. Coinbase benefits from this, as it uses stablecoin rewards to attract customers.