From 24/7 Wall St. · Sam Daodu · · 2m
Crypto chief reverses course after Senate bill fails
Matt Hougan ditched his warning about the CLARITY Act within 24 hours of its defeat, but buried three caveats that reveal his real concerns.
In brief
Matt Hougan ditched his warning about the CLARITY Act within 24 hours of its defeat, but buried three caveats that reveal his real concerns. Hougan accepted a weaker regulatory framework because the crypto market kept rising without it, but he still flagged near-term weakness and long-term risks from future…
Hougan's dramatic reversal
Bitwise CIO Matt Hougan compared the CLARITY Act to Punxsutawney Phil, warning a failed Senate vote would stall crypto. The next day, after the bill lost 49 to 50 on September 15, he withdrew that warning entirely.
What he said in January
Hougan believed the CLARITY Act was vital to crypto's bull run and that its failure would hamper the market's upward movement. He held this view until August 2026.
The market did the opposite
Bitcoin rose 38% from July 1 to September 4, climbing from $57,950 to over $80,000. Meanwhile, Polymarket odds of the CLARITY Act passing dropped from 39% to 18%.
Big firms moved anyway
Robinhood launched its blockchain mainnet, Morgan Stanley rolled out a Solana ETF, and DTCC settled tokenized stock trades. All happened as the bill's chances faded.
Why they had confidence
Hougan noted these firms found confidence in a pro-crypto SEC and CFTC through 2029. They got clarity of conviction without clarity in law.
“clarity of conviction without clarity in law”
Three caveats he kept
Agency rules can be reversed by future administrations. Only Congress can expand the CFTC's authority over spot crypto. The CLARITY Act would have been more resilient than agency regulations.
A trade, not a conversion
Hougan wanted the CLARITY Act because a statute is more durable than a rule. He accepted a weaker framework because the market kept rising without a stronger one.
He still flags near-term weakness
Hougan maintained a cautious outlook for the near term, anticipating market weakness until further agency announcements. The Federal Reserve raised rates to 4 percent on September 16.
Two tests ahead
First, whether the weakness ends when the SEC and CFTC publish proposals. Second, whether a future administration reverses the pro-crypto stance and proves his risk warning right.
Why the reversal matters
Hougan's rapid correction stands out in an industry where misjudgments often go unaddressed. He revised his market view but left the risk warning intact for the fourth quarter.
The short version
Hougan accepted a weaker regulatory framework because the crypto market kept rising without it, but he still flagged near-term weakness and long-term risks from future administrations.
