Matt Hougan, the Chief Investment Officer at Bitwise, expressed confidence that the crypto sector will continue to grow, even if the CLARITY Act fails to pass in the U.S. Senate.

The Senate's summer session is set to conclude on August 10, with the last working day scheduled for August 7. According to procedural rules, a motion to invoke cloture on H.R. 3633 must be filed by August 5; otherwise, the procedural vote will be postponed until the fall.

As of the time of this report, only nominations and a budget resolution are listed in the Senate's request registry. Meanwhile, the digital asset regulation bill has been on the agency’s calendar since June 1. It was approved by the House of Representatives in July 2025 and by the Banking Committee in May 2026.

At the beginning of August, Senate Majority Leader John Thune informed reporters that he hopes to hold a vote on the CLARITY Act before the recess.

"I believe we will hold a vote on the market structure. Whether we can move to consideration — we will see," he stated.

Thune added that the House will continue its sessions until all unfinished business is resolved.

A significant hurdle remains the stance of the Democrats. According to a report by Punchbowl, citing four sources, they are likely to block the procedure until the White House resolves ethical concerns. Republican Senator Thom Tillis acknowledged that there is currently no consensus.

Polymarket estimates the likelihood of the bill being signed into law by the end of this year at 15%, a sharp decline from 82% in February.

Source: Polymarket.

Bill May Enter "Zombie" Status

Hougan believes that if the vote is not held this week, there will not be a definitive answer regarding the bill's future. He suggests that the legislation could transition into a "zombie" status.

"Nothing can kill it, but it will continue to limp along," he wrote.

He speculated that the consideration might be pushed to September or December when Congress reconvenes for the "lame duck" session. Legislators often bundle multiple initiatives into a single package, requiring a vote on the entire document at once.

The ongoing uncertainty surrounding regulation is keeping some institutional investors from committing to digital assets, Hougan noted. He identified a decline in Polymarket's odds below 20% as the optimal scenario in the absence of a vote, which would remove the issue from the agenda and prepare the market for growth in the fall.

SEC Rules as an Alternative to the Law

Hougan referenced an interview with SEC Chair Paul Atkins aired on CNBC on July 27, where the regulator indicated readiness to issue rules that would address the same issues as the CLARITY Act.

"In the short term, SEC rules under Atkins are likely to be more crypto-friendly and innovative than regulations that would result from a bipartisan bill in Congress. They could even act as a catalyst. The risk is that the next administration may appoint a less favorable chair to the Commission," the Bitwise investment director remarked.

However, he believes that a new SEC head would not be able to undo the progress already made in the industry. He cited several developments:

  • Bitcoin ETFs becoming the most profitable exchange-traded funds for BlackRock;
  • Nasdaq and JPMorgan engaging in tokenization;
  • Visa, Mastercard, and Stripe collaborating with Coinbase to develop a stablecoin platform;
  • Robinhood launching its blockchain with Uniswap and Morpho integration;
  • The Office of the Comptroller of the Currency issuing trust licenses to Circle, Ripple, and Paxos.

According to Hougan, even under the most favorable scenario for regulators, the industry has at least two and a half years until another administration could replace the SEC chair. By that time, reversing course will likely be impossible — "you can't put the genie back in the bottle," he asserted.

He drew a parallel to the telecommunications reform in the U.S.: in 1994, the House of Representatives supported a bill almost unanimously (423 to 4), but the Senate never brought it to a vote. The market did not wait. Two years later, Netscape shares were trading publicly, Amazon and eBay launched, and millions of websites flooded the internet. The bill was eventually passed in 1996 with a vote of 91 to 5 in the same chamber.

"Congress needs to pass the bill — the sooner, the better for the entire industry. The CLARITY Act is certainly not without flaws, but overall it is a strong and timely piece of legislation," Hougan concluded.

It is worth noting that at the end of July, U.S. Treasury Secretary Scott Bessent urged the Senate to vote on the CLARITY Act immediately and accused the Democrats of delaying the process for political reasons.