In the dim corridors of the Bitwise citadel, where ledgers sigh like tired wives and the air smells of burnt coffee and unmade decisions, the CIO Matt Hougan speaks as if from a pulpit carved from old cobwebs: should the CLARITY Act fail to pass, crypto shall drift through a dreary three-year proving period before any real momentum dares to show its face. Without a law to lock in today’s friendly rules, a future administrator could waltz in, tip his hat, and wisp away the entire carnival of crypto as if it were a stray dog on a moonlit street.
He wrote, “To imagine what’s at stake, picture Senator Elizabeth Warren as the next chair of the SEC.”
Prediction markets, those soothsayers with spreadsheets for robes, wobble with unease. In January, Polymarket proclaimed the CLARITY Act would pass at 80%. After Coinbase CEO Brian Armstrong pronounced the current draft “unworkable,” those hopes sag to about 55%-a sentiment as stable as a chair carved from butter.
Two Paths for the Market
Hougan laid out the fates as if revealing the two doors in a provincial inn: one door leads to a rally that shoots upward like a fireworks display, the other to a “show me” period that would make a cautious clerk blink. If a version the industry can tolerate slips through, he expects the market to rally sharply, investors pricing in future growth from stablecoins and tokenization without a second thought.
If it fails, crypto enters what he calls a “show me” period. Three years to prove to the world that crypto matters to common folk and to the old-money gobblers of traditional finance. He likened this drift to Uber and Airbnb, wandering through a legal fog until they grew so popular regulators could no longer pretend they didn’t exist.
“Without that real-world adoption, crypto will be built on a regulatory foundation of sand,” Hougan wrote.
Gold’s Run Shows Why Crypto Matters
Hougan tied this to gold’s own flamboyant waltz. After a 65% rise in 2025, gold climbs another 16% in 2026 and now sails above $5,000. Half of its value in dollar terms arrived in a mere twenty months.
Central banks doubled their gold purchases after the U.S. seized Russian treasury assets in 2022. German economists now urge their government to pull gold reserves from the New York Federal Reserve. Norway’s sovereign wealth fund has just received a formal warning about potential confiscation risks.
Hougan sees this as a quiet nod to crypto. In a world where trust in institutions thins like old paint, assets that do not answer to some central puppeteer grow dearer-like a stubborn cat that won’t let itself be penned.
Where the Bill Stands
The House passed the CLARITY Act in July 2025 with bipartisan ceremony, and now it lounges with the Senate Banking Committee, where debates over stablecoin yields and investor protections have slowed progress to the pace of a sleepy town clock.
Hougan says he remains optimistic, since the administration has kept at least a few crypto promises. But he adds, “If it doesn’t pass, I think we need to prepare for a slower ascent.”
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2026-01-28 14:13