Bitwise CIO Matt Hougan has cooled his bearish take on the CLARITY Act’s Senate setback, and the reason is simple: crypto did not wait around for Washington to get its act together.
- Hougan now calls the setback a “speed bump, not a roadblock”
- The Senate failed to advance the CLARITY Act after cloture fell short of 60 votes
- Bitcoin rallied from a July low near $57, 950 to above $80, 000 before the vote
- Robinhood, Morgan Stanley, and DTCC kept pushing tokenization and crypto infrastructure forward
- The real fight is still over spot-market jurisdiction and who gets to regulate U.S. crypto trading
The procedural vote on Sept. 15 was a setback, not a death sentence. The Senate rejected cloture on the motion to proceed with H.R. 3633, meaning lawmakers did not even get to full debate. The roll call came in at 49 in favor, 50 against, with one senator not voting, and 60 votes were required to move forward.
Republican Sens. Susan Collins, Josh Hawley, Jerry Moran and Thom Tillis voted against cloture. Tillis later changed his vote after the outcome was clear, preserving the possibility of reconsideration. No new Senate vote has been announced.
Hougan had earlier compared the legislation to crypto’s “Punxsutawney Phil”, a quirky way of saying the bill was a signal for whether the industry’s U.S. future would look sunny or grim. He now says the latest blow is a “speed bump, not a roadblock.”
That shift matters because it gets at the real story: regulation is important, but it is not the only thing driving this market. Bitcoin moved from a July 1 low near $57, 950 to above $80, 000 by Sept. 4 even as Polymarket pricing for the CLARITY Act becoming law in 2026 dropped from 39% to 18%, according to Bitwise’s notes.
In other words, crypto did not sit in the corner waiting for Congress to finish its coffee. Markets kept moving, products kept launching, and regulators kept writing around the edges of the problem.
The bigger policy issue is not just whether one bill passes. It is whether the U.S. can finally sort out who oversees what in crypto, especially in spot markets, the direct trading markets for assets like bitcoin, as opposed to derivatives. That split between the SEC and CFTC has long been a source of confusion, which has helped lawyers, annoyed builders, and turned compliance teams into involuntary night-shift specialists.
Hougan’s revised view also rests on something more concrete than optimism: the industry has already kept building.
Robinhood Chain launched its public mainnet on July 1. Robinhood describes it as a permissionless, Ethereum-compatible Layer 2 built for financial services and tokenized assets, in plain English, a faster chain that can plug into Ethereum’s tooling and smart-contract ecosystem.
Robinhood paired that launch with Stock Tokens for eligible users in more than 120 countries through Robinhood Wallet. By September, the company said roughly 200 stock tokens were available. These tokens represent tokenized exposure to stocks, not actual shares sitting in a brokerage account with all the usual rights attached.
Morgan Stanley also added to the momentum. The SEC declared the Morgan Stanley Solana Trust registration effective on July 23, and Morgan Stanley Investment Management launched MSOL on NYSE Arca on July 28 alongside its Ether product, MSSE. Both products charge a 0.14% sponsor fee, seek exposure to SOL and Ether, and incorporate staking into their structures.
That is a useful reminder that the market is bigger than bitcoin alone. BTC is still the cleanest monetary asset in the space, but it does not cover every use case. Ethereum-compatible infrastructure, staking-based products, and tokenized exposures fill niches that bitcoin should not, and probably should not try to, occupy.
The institutional plumbing is moving too. DTCC processed live production transactions on July 15 using securities converted into DTC-tokenized assets, with roughly 40 firms participating. DTCC’s planned Tokenization Service is targeted for October 2026. That is the kind of unglamorous infrastructure work that rarely trends on crypto Twitter, but it is exactly where a lot of real adoption gets built.
Regulators, for their part, are not sitting on their hands either. The SEC published its proposed Regulation Crypto Assets on Aug. 18. The proposal includes tailored exemptions for certain investment-contract offerings involving crypto assets and a conditional safe harbor for when a crypto asset would no longer be treated as subject to an investment contract.
Paul Atkins, the SEC chairman, called legislation “indispensable” in an Aug. 18 statement. That is bureaucrat-speak for something very simple: the SEC can draft rules, but Congress still needs to provide a durable legal framework if it wants the U.S. to stop stumbling around in the dark.
The CFTC is also trying to press ahead. On Sept. 16, chairman Michael Selig said the agency was “locked in and ready to ship its rules for the new frontier of finance” using existing authority. The CFTC created an Innovation Task Force in March to work on crypto assets, blockchain, artificial intelligence and prediction markets.
That does not erase the importance of the Senate vote. Without CLARITY or something like it, the U.S. still lacks a clean statutory map for crypto market structure, and that uncertainty can slow custody decisions, product listings and exchange planning. It also keeps the SEC and CFTC in a turf war that helps no one except the lawyers billing by the hour.
The market reaction was ugly, but not surprising. Reuters reported Bitcoin fell about 4% to around $75, 908 after the Senate action, while shares of Coinbase and Circle dropped close to 9%. Crypto.news reported roughly $571 million in long positions were liquidated over 24 hours, including close to $190 million each in Bitcoin and Ether longs.
That is classic crypto behavior: one policy disappointment hits, leverage gets flushed, and overextended bulls get reminded that charts do not care about their feelings. Price action in this market is usually a messy mix of politics, positioning, macro conditions and trader overconfidence.
Macro was in the mix too. Reuters reported the Federal Reserve raised its benchmark rate on Sept. 16 to 3.75%, 4.00%, its first increase since 2023. Whether that was the main driver of the selloff or just another weight on sentiment, the point is the same: bitcoin does not trade on one headline. Interest rates, liquidity and risk appetite still matter, especially when leverage is heavy.
By Sept. 17, CoinGecko showed Bitcoin near $76, 274, up roughly 0.5% over 24 hours and down around 2.1% over seven days. That is not a victory lap, but it is also not a collapse.
Hougan’s revised outlook is sensible in that context. The CLARITY Act still matters because it could reshape the U.S. regulatory map, especially around CFTC authority over spot markets. But crypto has already learned how to keep moving while Congress dithers. That is encouraging, and a little embarrassing for Washington, which is basically the default U.S. policy combination.
For bitcoin holders, the lesson is straightforward: legislation can improve the path, but it is not the only path. For builders, the message is even clearer: keep shipping, keep documenting, and keep the lawyers close. For regulators, the uncomfortable truth is that capital formation, tokenization and blockchain infrastructure are not waiting for a perfect bill, because perfect bills rarely survive the Senate without taking several hits to the face.
Key takeaways
-
What does the CLARITY Act setback actually mean?
The Senate failed to clear the procedural hurdle needed to begin debate, so the bill was stalled rather than finally defeated. It is a delay, not a burial. -
Why did Matt Hougan soften his view?
Because Bitcoin rallied even as the bill’s odds fell, and because the broader crypto build-out kept moving. His new framing is that the vote was a setback, not a market-ending event. -
Why does spot-market jurisdiction matter?
It decides which U.S. regulator oversees direct crypto trading. Clearer lines would reduce confusion, which is badly needed in a market that has spent years in regulatory limbo. -
Are institutions still building in crypto?
Yes. Robinhood launched Robinhood Chain and stock tokens, Morgan Stanley launched SOL and Ether products, and DTCC has already processed tokenized production transactions. -
Did the Senate vote crush Bitcoin?
No. Bitcoin sold off and leverage got flushed, but the move looked like a setback inside an ongoing market, not a structural break. -
Can regulators keep moving without Congress?
They can move part of the way using existing authority, and both the SEC and CFTC are trying. But the SEC itself says legislation is still indispensable for a lasting framework. -
Is tokenization just hype?
Not anymore. It is still early and messy, but Robinhood, Morgan Stanley and DTCC are all pushing real products and infrastructure, which is a lot more serious than the usual conference-panel vapor.
Further reading
For the legislative and market backdrop behind the Senate vote, these resources add useful context.
