Bitwise CIO Matt Hougan says the SEC is ready to write crypto rules if the CLARITY Act misses Friday's deadline. Polymarket odds sit at 27%, down from 82% in February. Atkins told CNBC the agency is 'ready, willing and able' to act.
Bitwise Chief Investment Officer Matt Hougan says the SEC is prepared to write its own crypto rules if the CLARITY Act misses Friday's recess deadline. The bill would not truly die, he wrote in a note Tuesday. It enters what he called a "walking dead" state, with revival possible in September or as part of a year-end omnibus package in December.
Prolonged uncertainty hurts markets more than a clean failure, Hougan said. Professional investors are sitting on the sidelines waiting for resolution. "The best thing that can happen if Clarity doesn't pass this week is that the Polymarket odds break solidly lower, into the teens at least, so we can put the uncertainty behind us," he wrote.
Polymarket odds currently sit at 27%, down from 82% in February. The drop reflects the Senate's inability to schedule a floor vote before the August recess.
Hougan pointed to SEC Chair Paul Atkins, who told CNBC the agency is "ready, willing, and able to come out with rules that address the same issues as Clarity." Rulemaking under Atkins could actually be more crypto-friendly than a bipartisan bill, Hougan said, and may accelerate progress in the near term.
The risk is a future administration installing a less friendly SEC chair, he acknowledged. Hougan argued the industry has at least two and a half years of the current regulatory environment to entrench itself deeply enough that no future chair can reverse it. He pointed to the pace of institutional adoption as the reason.
To illustrate, Hougan drew a parallel to 1994, when sweeping telecom reform passed the House 423-4 before dying in the Senate without a floor vote. The internet did not wait. "Washington is dysfunctional," Hougan wrote. "It's not a referendum on crypto's validity as a pillar of the global financial infrastructure. That ship has long since sailed."
BlackRock's most profitable ETF is now a Bitcoin ETF. Nasdaq and JPMorgan are tokenizing assets aggressively. Visa, Mastercard, and Stripe are building a stablecoin platform with Coinbase. Robinhood Markets launched its own blockchain integrating with DeFi apps. The OCC has granted trust charters to Circle, Ripple, and Paxos.
Netscape launched, Amazon and eBay opened for business, and Congress eventually passed the Telecommunications Act of 1996 by a 91-5 margin in the same chamber that could not act two years earlier. The delay barely mattered.
The CLARITY Act delay risks US crypto lead, Haridopolos warns. Polymarket's 27% odds reflect the market's view that passage before recess is unlikely, though the bill's walking-dead status keeps the door open for later action.
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