Bitwise CIO: Crypto May Be Better Off After CLARITY Act’s Senate Defeat

Senate. That failure was followed by a market rally: Bitcoin and Ethereum climbed roughly 11%, and several altcoins posted larger gains. The outcome surprised some observers because the crypto industry had publicly supported the bill for the legal certainty it promised.

Proponents saw CLARITY as a route to clear, national rules for crypto activity. The bill would have created a federal licensing system for spot crypto exchanges and included provisions affecting how exchanges combine trading and brokerage services. It also contained rules aimed at stablecoins.

Matt Hougan, Chief Investment Officer at Bitwise, framed the Senate failure as a mixed outcome. He acknowledged industry support for legal clarity but flagged parts of the final bill that could have limited certain business models.

Concrete business effects the bill would have had

• Stablecoin rewards: CLARITY would have limited platforms' ability to pay interest or rewards on stablecoin balances. Those restrictions could have affected user-acquisition strategies used by platforms such as Coinbase.
• Exchange licensing and service structure: A national licensing regime and tighter limits on combining trading and brokerage could have reshaped how major exchanges operate.

With CLARITY off the near-term table, existing practices for stablecoins and exchange services remain in force. Hougan sees near-term benefits for firms that use stablecoin-based rewards to attract users. He also points to recent agency moves that are providing alternate paths for market innovation. For example, the SEC allowed trading of certain tokenized U.S. stocks under temporary rules, giving tokenization projects a real-market environment to test infrastructure.

Tokens and revenue-generating models

Regulatory risk remains. A future change in SEC, CFTC, or Treasury leadership could lead to tougher enforcement or different rule interpretations. Hougan acknowledges this possibility but stated his expectation that crypto is "too big to crush." That framing expresses confidence in crypto's resilience but does not eliminate the possibility of adverse rule changes.

Michael Saylor, cited in the coverage, argued for a different approach: use the next few years to build compliant products under current rules rather than accept restrictive compromises for the sake of passing legislation. His suggested priorities are products that lower costs, broaden access, and increase user control.