Matt Hougan has dropped his forecast that cryptocurrency markets faced another six weeks of difficult trading if the Clarity Act stalled, arguing that Bitcoin’s recent performance has already weakened the link between the bill’s prospects and short-term market direction.
The reassessment followed a Senate procedural vote in which the measure received 49 votes, below the 60 required to advance. Hougan had previously said a stalled bill could leave crypto markets under pressure for several more weeks. Bitcoin initially fell about 4% after news of the vote, but Hougan pointed to a wider divergence that he believes has changed the outlook.
Since July 1, Bitcoin has risen from roughly $57,950 to more than $80,000 on Sept. 4, according to the price levels cited by Hougan. Over the same period, Polymarket’s implied probability that the Clarity Act would become law this year fell from 39% to 14%.
That combination challenges the idea that progress in Congress is the immediate driver of crypto prices. A legislative setback can trigger an abrupt sell-off, particularly when traders had positioned for a positive vote, yet Bitcoin’s broader advance has continued while the bill’s chances declined.
Senate setback leaves legislation stalled
The Clarity Act is intended to establish a clearer US market structure for digital assets, including a framework for determining which tokens fall under securities rules and which would be treated as commodities. The lack of such legislation has left crypto businesses facing overlapping and sometimes uncertain claims of authority by the Securities and Exchange Commission and Commodity Futures Trading Commission.
A failed procedural vote does not formally kill a bill, but it prevents the Senate from moving directly into full consideration under that route. Supporters could seek a revised measure, negotiate changes that attract additional votes, or attach elements of the proposal to other legislation. Those paths can take time and offer no certainty of passage.
The immediate consequence is that Congress has not provided the comprehensive statutory framework many US crypto companies have sought. Firms launching tokens, networks, trading products, or custody services must continue to assess how existing securities and commodities laws could apply before a regulator provides a definitive answer.
That uncertainty affects product design as much as enforcement risk. A token’s distribution model, governance arrangements, marketing language, and trading venues can all shape how lawyers assess its regulatory treatment. Without legislation that sets common definitions and jurisdictional boundaries, companies may build around cautious assumptions or delay offerings that could draw scrutiny.
Regulators have room to write their own rules
Hougan’s updated view rests partly on the ability of the SEC and CFTC to develop crypto policy without waiting for Congress. SEC Chair Paul Atkins has said the agency is prepared to address issues covered by the Clarity Act through rulemaking, while CFTC Chair Mike Selig has said the commodities regulator can proceed with separate crypto rules.
Agency rulemaking could provide more immediate guidance on registration, trading, custody, disclosures, and the treatment of certain digital-asset transactions. It could also reduce the extent to which companies rely on enforcement cases, no-action requests, and court decisions to interpret decades-old statutes.
The limits of that approach remain substantial. Congress alone can expand the CFTC’s authority over spot crypto markets, where assets are bought and sold for immediate delivery rather than through derivatives contracts. The CFTC has a well-defined role overseeing commodity futures and other derivatives, but its direct authority over underlying spot markets is narrower.
Hougan also noted that rules issued by the SEC or CFTC could be revised or withdrawn by a later administration. A law passed by Congress would offer a more durable settlement, though it would still require regulators to write detailed implementing rules.
The result could be a two-track period for US crypto policy: agencies may move ahead on matters within their current authority, while the larger question of spot-market oversight and token classification remains unresolved in Congress.
Institutional activity has continued despite legislative uncertainty
Hougan cited several examples of large financial firms expanding crypto-related activity despite the Clarity Act’s uncertain path. He referred to Robinhood’s blockchain launch, Morgan Stanley’s Solana exchange-traded fund initiative, and the Depository Trust & Clearing Corporation’s first settlement batch involving tokenized stock trades.
Taken together, those developments point to continued experimentation with blockchain infrastructure and regulated investment products even without a completed market-structure law. Financial institutions have increasingly focused on tokenization, which records conventional assets such as stocks or fund shares on blockchain-based systems, as well as on products that give clients regulated exposure to digital assets.
That activity does not remove the legal complications facing token issuers and crypto trading platforms. It does show that firms can pursue specific projects under existing rules, particularly where the underlying asset, product structure, and regulated entities are already familiar to US authorities.
Hougan linked the ongoing institutional expansion to the presence of crypto-friendly leadership at the SEC and CFTC through 2029. That timeline could give agencies several years to issue guidance and rules, although formal rulemaking often involves proposals, public comment periods, revisions, and potential legal challenges.
Risk assets face pressures beyond Washington
Bitcoin’s decline after the Senate vote occurred alongside broader macroeconomic concerns. Hougan cited interest-rate worries and rising oil prices as possible contributors to the sell-off, factors that can weigh on speculative assets by increasing financing costs and reviving inflation concerns.
The Federal Reserve raised its policy rate by 25 basis points this week, according to the figures in the article, while Brent crude rose above $104 a barrel following supply cuts in the Middle East. Higher energy prices can feed into inflation expectations, potentially making central banks less willing to ease monetary policy.
Spot crypto exchange-traded funds also recorded sharp outflows after the vote. More than $450 million left the products on Tuesday, followed by another $295 million on Wednesday, according to the figures cited in the article. Those flows suggest that some traders reduced exposure quickly after the legislative setback, though fund movements alone do not establish a lasting change in demand.
Bitcoin was trading near $76,500 in the latest session described in the article, with activity subdued as market participants awaited signs of how rapidly the SEC and CFTC will move. The Senate vote has weakened the case for expecting a quick legislative resolution, but Hougan’s revised position is that crypto markets now have more forces shaping them than the Clarity Act alone.
Want deeper context on policymaker impact? Explore how regulation shapes crypto in the possible future of crypto regulation.
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