TLDR
- Bitwise CIO Matt Hougan warns crypto must become essential to daily American life if Congress fails to pass market structure legislation
- Polymarket odds for the Clarity Act dropped from 80% to 50% after Coinbase CEO Brian Armstrong withdrew support over problematic provisions
- Senate Agriculture Committee delayed its crypto markup hearing from Monday to Thursday due to winter storms
- Hougan says passing the bill would trigger a sharp market rally, while failure would result in a slower “wait and see” market
- Without legislation, crypto has three years until the end of Trump’s term in 2029 to prove indispensable through stablecoin and tokenization adoption
The crypto industry faces a critical decision point as Congress debates market structure legislation. Bitwise Chief Investment Officer Matt Hougan said the industry needs to become embedded in everyday American life if lawmakers fail to pass a crypto bill.
LATEST: ā” Bitwise CIO Matt Hougan says crypto is at a critical juncture as the chances of the Clarity Act passing waver amid industry pushback, with the sector needing mass stablecoin adoption if legislation fails. pic.twitter.com/1nBJ0egw2U
— CoinMarketCap (@CoinMarketCap) January 28, 2026
Hougan published his analysis in a Monday blog post. He explained that legislation moving through the Senate would lock in current pro-crypto regulations.
The Clarity Act aims to clarify how the SEC and CFTC should regulate digital assets. Two Senate committees are working on the bill, which has already passed the House.
Market sentiment around the bill has shifted recently. Polymarket traders initially gave the legislation an 80% chance of passing in early January. Those odds dropped to 50% after industry pushback emerged.
Industry Concerns Delay Progress
Coinbase CEO Brian Armstrong withdrew support for the current draft. He stated the bill contains provisions that could harm consumers and limit competition.
The Senate Agriculture Committee postponed its markup hearing from Monday to Thursday. Winter storms that hit the US over the weekend caused the delay.
Senate Banking and Agriculture Committees need bipartisan support to advance the bill. Lawmakers are negotiating over ethics provisions and potential bans on stablecoin yields.
Hougan warned that without legislation, a future administration could reverse the current pro-crypto policies. The industry would have three years until President Trump’s term ends in 2029 to prove its value.
Two Different Market Paths
Hougan outlined two possible scenarios for the crypto market. If Congress passes a version the industry accepts, he expects a sharp market rally.
Investors would assume guaranteed growth for stablecoins and tokenization with legislation in place. They would start pricing that future growth into current valuations.
If the bill fails, the market would enter a “wait and see” phase. Real-world adoption would need to happen before investors reward higher prices.
Without federal legislation, crypto would operate on weak regulatory foundations. Hougan compared this to building on sand rather than solid ground.
He said crypto must follow the path of companies like Uber and Airbnb. Those businesses became too popular for regulators to ignore despite operating in grey areas.
The industry needs to make stablecoins and tokenized stocks part of regular American life. If these products gain wide adoption, favorable regulations would follow regardless of which party controls Washington.
Wall Street broker Benchmark offered a different view. The firm said legislative failure would delay but not stop crypto’s growth in the US market.
Benchmark expects investors to favor bitcoin exposure and infrastructure companies over exchanges and DeFi projects. This would happen if regulatory uncertainty continues.
Hougan remains optimistic about the bill’s chances. He pointed to the Trump administration delivering on campaign promises to the crypto sector.
The Senate Agriculture Committee will hold its markup hearing on Thursday. This meeting represents the next key moment for the legislation’s future.
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