Key facts
- Bitwise CIO Matt Hougan believes agency rulemaking will drive the next crypto bull market, not legislative action.
- Hougan stated the failure of the CLARITY Act in the Senate is a "speed bump, not a roadblock" for crypto markets.
- Bitcoin rallied from $57,950 on July 1 to over $80,000 on September 4, while odds for the CLARITY Act's passage fell from 39% to 18%.
- The SEC and CFTC are seeking public comment on a harmonized framework for BTC, ETH, and XRP futures.
- The CFTC has cleared passive software developers to build trading tools without broker registration.
Bitwise Chief Investment Officer Matt Hougan has shifted his view on the catalysts for the next cryptocurrency bull market, now emphasizing regulatory agency rulemaking over legislative action. In a September 16 client memo, Hougan described the recent failure of the CLARITY Act in the Senate as a "speed bump, not a roadblock," reversing his earlier stance that a legislative failure could stall the market.
Hougan's argument hinges on a divergence between market performance and legislative odds. He noted that Bitcoin rallied from a July 1 low of $57,950 to a September 4 peak above $80,000, even as the odds of the CLARITY Act passing by 2026 fell from 39% to 18% on Polymarket. This price action, he contends, shows that the bull market does not require the CLARITY Act to continue.
Instead, Hougan pointed to actions by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) as the next key drivers. He cited SEC Chair Paul Atkins' statement that the agency is "ready, willing, and able" to create rules, and CFTC Chair Mike Selig's assertion that his agency is "locked in and ready to ship its rules." Hougan believes these agency-led rules could be more favorable to crypto than the CLARITY Act, as they would not require navigating Democratic votes on contentious clauses related to decentralized finance and illicit finance.
The CFTC has already begun this process, clearing passive software developers to build trading tools without broker registration. Both agencies are also seeking public comment on a harmonized framework for Bitcoin, Ethereum, and XRP futures, and the SEC is preparing a framework for 24/7 trading of tokenized U.S. stocks. While Hougan acknowledges that agency rules can be reversed by a future administration, he has deprioritized this durability concern in favor of immediate regulatory progress.