Bitwise Chief Investment Officer Matt Hougan has provided new insights into Bitcoin's continued rally, stating that the upward trend could continue as long as debt-related concerns do not ease. According to Hougan's analysis shared on social media platform X, between July 1st and September 15th, the probability of the US Clarity Act being passed this year dropped from 39% to 18% in the Polymarket, while Bitcoin increased by 38% during the same period. This data reveals that expectations regarding regulatory developments in the cryptocurrency market are not aligning with Bitcoin's price movement, with concerns about the US debt outlook becoming a significant factor in market pricing. Hougan's revised position centers on Bitcoin's performance while expectations for the legislation deteriorated, with Polymarket pricing for the CLARITY Act becoming law in 2026 dropping from 39% to 18% over the same period, though it has since fallen to 14% as of recent reports.
Despite the Senate's failure to advance the CLARITY Act, regulatory momentum continues with SEC Chairman Paul Atkins and CFTC Chairman Michael Selig both signaling favorable rules for the crypto industry. As reported by The Daily Wolf with Scott Melker, the SEC has already proposed Regulation Crypto, which provides safe harbor and innovation exemptions for fundraising, with both regulators already laying out comprehensive rules for the crypto sector. However, industry experts note that while this regulatory clarity is significant, it falls short of the permanent legislative framework that the Clarity Act would have provided. The current regulatory approach faces the challenge of potential reversal during regime changes, similar to how previous regulatory regimes have been overturned, though experts expect the industry will receive most of what was expected from the Clarity Act over the next 2.5 years.
The Senate rejected cloture on the motion to proceed with H.R. 3633 on September 15, recording 49 votes in favor and 50 against, with one senator not voting. The action required 60 votes to invoke cloture and move toward debate, leaving the crypto market structure bill unresolved rather than formally defeated. According to reports from crypto.news, Bitcoin fell roughly 4% to around $75,908 immediately after the vote, while Coinbase and Circle shares dropped close to 9% as investors reacted to the failure to advance the bill. Crypto derivatives markets recorded additional selling pressure, with exchanges liquidating roughly $571 million in long positions over 24 hours, including close to $190 million each in Bitcoin and Ether longs.
The Senate's failure to advance the CLARITY Act leaves the U.S. crypto industry without an overarching federal framework and with the roles of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) shrouded in ambiguity. As reported by crypto.news, Lin Han, CEO and founder of crypto exchange Gate, whose exchange focuses primarily on Asia and is ranked fifth on CoinGecko, said the short-term winners are likely to be digital asset service providers with licenses in overseas regulated markets. The European Union adopted its Markets in Crypto Asset (MiCA) regulations in 2023, which came into full effect in July, while Asian markets are advancing their digital asset frameworks. Stefan Muehlbauer, head of U.S. government affairs at blockchain security firm CertiK, noted that the winners are overseas crypto hubs, grey-market operators and international jurisdictions like Asia and Europe that are rapidly expanding their market share under clear, established rules.
By September 17, Bitcoin had recovered to near $76,274, up roughly 0.5% over 24 hours but down around 2.1% over seven days, according to CoinGecko. The price remained well above Bitwise's $57,950 July starting point while trading below the early-September level above $80,000. As reported by Reuters, the macro backdrop changed again on September 16 when the Federal Reserve raised its benchmark rate to 3.75%–4.00%, its first increase since 2023, with most officials projecting at least one more increase during 2026. Hougan's expectation that the crypto bull market can continue without the CLARITY Act remains Bitwise's market forecast, with the SEC's Regulation Crypto Assets proposal still accepting comments through October 20.
