Key Takeaways
- • Bitwise identified four crypto sectors that rallied following the CLARITY Act's Senate failure on September 15: stablecoin platforms, established exchanges, tokenization businesses, and revenue-generating tokens, with NEAR Protocol gaining 104% and Uniswap rising 49% between the vote and September 30.
- • Stablecoin platforms retained the ability to offer balance rewards under the GENIUS Act after the CLARITY Act setback, with Coinbase positioned as the largest beneficiary of preserved business flexibility.
- • Bitcoin gained 8% and Ethereum 7% in the measurement period following the failed Senate vote, according to Bitwise chief investment officer Matt Hougan's September 30 memo.
- • The crypto industry secured faster regulatory action through SEC decisions, including a five-year testing route for tokenized U.S. stock trading venues, despite sacrificing long-term legislative certainty that the CLARITY Act would have provided.
- • Hougan cautioned that agency-level victories offer less protection than statutory law against potential reversals under a future administration taking office in January 2029, though expanded blockchain adoption by major financial institutions may reduce reversal risk.
Summary
Bitwise Asset Management's chief investment officer Matt Hougan attributed crypto's post-vote rally to the regulatory relief created by the CLARITY Act's Senate defeat on September 15. Rather than viewing the legislative setback as negative, Hougan argued that the industry benefited from avoiding certain compromises while gaining faster regulatory wins through administrative action. Bitcoin rallied 8% and Ethereum 7% between the failed cloture vote and September 30, while select altcoins saw more dramatic gains: NEAR Protocol surged 104% and Uniswap climbed 49% during the same window.
Hougan's analysis identified stablecoin platforms as primary beneficiaries, specifically highlighting their preserved ability to offer balance rewards under the GENIUS Act framework following the CLARITY Act's failure. Coinbase emerged as the largest expected beneficiary of this regulatory flexibility. Beyond stablecoins, established cryptocurrency exchanges retained competitive advantages that Hougan contended the proposed legislation would have curtailed. Tokenization businesses and revenue-generating tokens also gained from the legislative stalemate, as SEC action opened a five-year testing route for qualifying tokenized U.S. stock trading venues—a regulatory pathway that sidestepped the restrictions embedded in the proposed bill.
Hougan cautioned, however, that administrative victories carry material political risk. Agency-level decisions lack the durability of statutory law and face potential reversal when a new administration assumes office in January 2029, which could appoint SEC and CFTC leadership with stricter regulatory postures toward crypto. He noted that expanding blockchain adoption among major financial institutions could mitigate reversal risk by the next administration cycle, as those firms would have accumulated years of blockchain development infrastructure by then. The tradeoff, in Hougan's framing, was that "crypto sacrificed long-term certainty and got better rules, faster."
Hougan's analysis identified stablecoin platforms as primary beneficiaries, specifically highlighting their preserved ability to offer balance rewards under the GENIUS Act framework following the CLARITY Act's failure. Coinbase emerged as the largest expected beneficiary of this regulatory flexibility. Beyond stablecoins, established cryptocurrency exchanges retained competitive advantages that Hougan contended the proposed legislation would have curtailed. Tokenization businesses and revenue-generating tokens also gained from the legislative stalemate, as SEC action opened a five-year testing route for qualifying tokenized U.S. stock trading venues—a regulatory pathway that sidestepped the restrictions embedded in the proposed bill.
Hougan cautioned, however, that administrative victories carry material political risk. Agency-level decisions lack the durability of statutory law and face potential reversal when a new administration assumes office in January 2029, which could appoint SEC and CFTC leadership with stricter regulatory postures toward crypto. He noted that expanding blockchain adoption among major financial institutions could mitigate reversal risk by the next administration cycle, as those firms would have accumulated years of blockchain development infrastructure by then. The tradeoff, in Hougan's framing, was that "crypto sacrificed long-term certainty and got better rules, faster."
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