Bitwise Chief Investment Officer (CIO) Matt Hougan has issued a warning to the crypto industry: failure to pass the CLARITY Act could significantly weaken market momentum and potentially derail the next major crypto bull run expected in 2026.
In a recent blog post, Hougan emphasized that the bill plays a crucial role in securing long-term regulatory certainty for digital assets in the United States. Without it, he argues, the current pro-crypto stance could quickly unravel under a future administration.
Regulatory Certainty Seen as Key to Market Confidence
According to Hougan, the CLARITY Act would formally codify today’s relatively supportive regulatory environment into law — a move he believes is essential for sustained growth in the crypto market.
“I’ve written before about how important it is that Congress pass the Clarity Act. The reason is simple: The Clarity Act would cement the current pro-crypto regulatory environment into law. Without it, a future administration could reverse today’s pro-crypto push,” Hougan stated.
Hougan made the comments ahead of the Senate Agriculture Committee’s scheduled markup of the crypto bill, highlighting the urgency surrounding the legislation’s progress.
Prediction Markets Signal Waning Confidence
Hougan also pointed to shifting sentiment in prediction markets as an early warning sign. While earlier forecasts suggested an 80% chance of the bill passing, those odds have reportedly fallen to around 50%, indicating growing uncertainty among market participants.
The Bitwise CIO noted that opposition from major industry players, including Coinbase, has also weighed on the bill’s prospects. He suggested that resistance from within the crypto sector itself may have unintentionally undermined momentum behind the legislation.
A “Show Me” Phase for Crypto If the Bill Fails
If the CLARITY Act fails to pass, Hougan believes the crypto industry will enter what he describes as a “show me” period — a critical phase where the sector must prove its real-world value.
“If the bill fails, I believe crypto will enter a ‘show me’ period. That means it will have three years to make crypto indispensable to the everyday lives of regular Americans and the traditional financial industry,” Hougan explained.
In this scenario, crypto projects would face heightened pressure to demonstrate practical utility beyond speculation, particularly in payments, financial infrastructure, and consumer-facing applications.
Senate Deliberations Continue as White House Pushes Forward
As of now, the Senate Agriculture Committee is expected to discuss the CLARITY Act in its upcoming session. Notably, several Democratic senators on the committee have reportedly agreed not to raise objections that could stall the bill’s progress — a development viewed as positive for the crypto market.
Meanwhile, the Senate Banking Committee has yet to outline its next steps, having delayed formal discussions to focus on other legislative priorities. Despite the delay, negotiations are said to be ongoing behind the scenes.
The White House remains actively involved in the process. Trump’s digital assets advisor, Witt, has publicly urged lawmakers to resolve outstanding issues and pass the bill before momentum is lost.
Hougan Remains Cautiously Optimistic
Despite the growing uncertainty, Hougan maintains confidence that the current administration will ultimately approve the CLARITY Act. However, he warns that delays or failure could have long-term consequences for market sentiment, investment flows, and the timing of the next crypto bull cycle.
For the crypto industry, the outcome of the CLARITY Act may prove to be a defining moment — not just for regulation, but for whether the next bull run arrives on schedule or stalls before it begins.
