Bitwise CIO Matt Hougan Says CLARITY Act Delay Could Trigger Brief Market Volatility

The delayed CLARITY Act vote has left crypto traders facing renewed regulatory uncertainty, while Bitwise CIO Matt Hougan expects a possible short-term market reaction.

Bitwise CIO Matt Hougan Warns of Short-Term Volatility

Bitwise Chief Investment Officer Matt Hougan said the best outcome could be for market expectations around the CLARITY Act to fall sharply if the bill does not pass this week.

Hougan said Polymarket odds of the legislation passing in 2026 should drop into the teens. He argued that a sharp decline would remove uncertainty that has kept traders focused on the timing of the Senate vote.

“If the Polymarket odds break solidly lower into the teens at least so we can put the uncertainty behind us,” Hougan wrote in a recent Bitwise CIO memo.

Hougan said such a move could cause the crypto market to “wobble for a minute” before potentially creating conditions for a market recovery in the fall. His comments came as the Senate prepared to leave Washington without voting on the legislation.

Senate Delays CLARITY Act Vote Until September

Senate Majority Leader John Thune confirmed that lawmakers would not vote on the CLARITY Act before the August recess. The legislation is now expected to return to the Senate agenda when lawmakers reconvene in September.

The delay follows continued discussions over several provisions, including ethics rules, illicit finance measures and consumer protections. The bill requires 60 votes to overcome a filibuster, while Republicans hold 53 seats in the Senate.

Thune said the legislation would be placed near the top of the Senate agenda after lawmakers return from recess. The additional time could allow negotiators to continue working on provisions that have prevented a vote.

Coingape reported that proposed ethics language could require President Donald Trump to divest from certain crypto-related businesses. The provision has become part of the wider negotiations surrounding the legislation.

Crypto Markets Await Regulatory Clarity

The CLARITY Act seeks to establish a regulatory framework for digital assets while defining the roles of the Securities and Exchange Commission and Commodity Futures Trading Commission.

The Senate delay removes a near-term legislative event that traders had been monitoring. Bitcoin recently traded above $64,400, while XRP remained near $1.05 and Ethereum held above $1,900.

The delay comes as U.S. officials continue to discuss the country’s position in the digital asset sector. President Donald Trump has said the United States should maintain its lead in crypto innovation and avoid allowing China to take a dominant position in the industry.

For more updates on the U.S. crypto bill, follow our live coverage on CLARITY Act Live Updates