The morning after the CLARITY Act died, the CFTC chairman said his agency was ready to ship its own rules. Bitwise’s chief investment officer thinks that is the whole story.
Matt Hougan’s argument is that the rally never depended on the bill. Between July 1 and September 4, Polymarket’s odds on CLARITY passing fell from 39% to 18% — and Bitcoin rose from $57,950 to above $80,000.
He set out the case in a memo published on September 16, a day after cloture failed 49-50.
The Chart
Bitwise plotted Polymarket’s odds on CLARITY becoming law this year against Bitcoin’s price from July 1 to September 4.
Bitcoin bottomed at $57,950 on July 1 and peaked above $80,000 on September 4. Over the same stretch, the implied probability of passage fell from 39% to 18%. The two moved in opposite directions throughout.
Hougan’s explanation is that institutions were not waiting for legislation. He points to Robinhood launching its own blockchain, Morgan Stanley launching a Solana ETF, and DTCC settling its first batch of tokenized stock trades — all during a quarter when the bill’s prospects were deteriorating.
Why He Thinks They Moved Anyway
The argument rests on agency personnel rather than statute. Hougan describes an extraordinarily pro-crypto SEC and CFTC in place until 2029, which he says gave firms what he calls clarity of conviction without clarity in law.
SEC Chairman Paul Atkins told CNBC in July that the agency was ready, willing and able to produce rules addressing the same issues as CLARITY, and proposed Regulation Crypto Assets in August. CFTC Chairman Michael Selig had said he would move swiftly if the bill failed.
Selig confirmed it the morning after the vote, posting on September 16 that the agency is locked in and ready to ship its rules for the new frontier of finance.
What Hougan Concedes
The memo does not argue the bill was unnecessary. Hougan calls CLARITY a good bill that would have strengthened investor protections and given crypto rules outlasting this administration, and says passage would have made crypto the consensus trade for the fourth quarter with prices almost certainly higher.
He also concedes the two limits that matter. Agency rules can be reversed by the next administration. And only Congress can give the CFTC real authority over spot markets — the gap no rulemaking closes.
Bitcoin fell roughly 4% on September 15, which he attributes partly to the vote and partly to concerns about rates and oil. The Federal Reserve raised rates by 25 basis points the following day, its first increase since July 2023.
Read With the Interest Attached
Bitwise is a crypto asset manager whose products depend on the market it is describing, and the memo is written for its investor audience rather than as neutral analysis. Its conclusion — that the destination is the same and crypto always finds a way to keep building — is an outlook, not a finding.
The data underneath it is checkable, and that is the part worth taking. Whether the divergence between odds and price continues after the vote is a different question from whether it existed before it.
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