According to Matt Hougan, the Chief Investment Officer at Bitwise, the cryptocurrency market can continue its growth even without the passage of the CLARITY Act. He has reassessed the implications of the bill's failure in the U.S. Senate.

"I no longer view the previous scenario as the most likely. On the contrary, I believe that the failure of the CLARITY Act may be much less significant than today's headlines suggest," Hougan stated.

Reasons Behind Hougan's Change of Opinion

Earlier this year, Hougan likened the CLARITY Act to Punxsutawney Phil, the groundhog traditionally used in the U.S. to predict the length of winter. He had anticipated that the failure of the initiative would lead to six more weeks of adverse trends for the digital asset sector.

Now, Hougan has pointed out the divergence between Bitcoin's price movements and the expectations of participants on Polymarket.

The price of Bitcoin surged from a local low of around $57,950 on July 1 to over $80,000 by September 4. During the same period, the likelihood of the CLARITY Act passing in 2026 on the platform dropped from 39% to 18%.

Probability of CLARITY Act passage compared to Bitcoin price. Source: Bitwise.

If Bitcoin's growth were reliant on the bill, its declining prospects would have correlated with a drop in Bitcoin's price, according to Hougan. Instead, the two indicators moved in opposite directions.

Wall Street also didn’t wait for Congress to act. As examples, Hougan noted the launch of the Robinhood Chain blockchain, the introduction of a Solana ETF by Morgan Stanley, and the first settlements by DTCC for tokenized stocks.

He believes that companies are counting on a favorable approach from the current leadership of the SEC and CFTC. Both agencies have expressed willingness to implement some of the rules outlined in the CLARITY Act independently.

However, such measures cannot fully replace the legislation. The next administration could reassess the regulators' decisions, and only Congress can expand the CFTC's authority over the spot crypto market.

Following the vote, Bitcoin experienced a decline of about 4%. Hougan attributed this drop not only to the situation surrounding the CLARITY Act but also to concerns regarding interest rates and oil prices.

Democrats to Continue Negotiations

On September 16, Democratic Senator Kirsten Gillibrand and six other party members confirmed their intention to keep working on the CLARITY Act.

"This week was a setback, but not the end of important work. We remain committed to engaging with both parties to pass the legislation," their joint statement read.

The senators advocated for regulations that would protect consumers, hold wrongdoers accountable, create business certainty, and establish ethical constraints for elected officials.

Their stance comes in light of recent concessions from Republicans. According to the authors of the final draft, it included 126 significant changes requested by Democrats.

U.S. President Donald Trump also agreed to tighten restrictions on officials' involvement in the crypto business.

Officials and their spouses would be required to sell significant stakes in industry companies or transfer them to independent management. State prosecutors would be empowered to seek enforcement of these requirements through the courts.

Despite these compromises, the bill failed to gain support from any Democrats. On September 15, the Senate considered a procedural motion necessary to advance the CLARITY Act discussion. The motion required 60 votes for approval; the outcome was 49 in favor and 50 against.

According to the Senate roll call list, all 49 votes in favor belonged to Republicans. Among Democrats, 44 voted against. The initiative was also rejected by four Republicans and two independent senators.

All seven Democrats who later announced their intention to continue working on the law did not support the motion to begin its consideration.

Prior to the vote, Bernstein analysts described the Republicans' concessions as "the maximum possible" and suggested they might attract a few votes from the Democratic Party.