Bitwise Chief Investment Officer Matt Hougan had previously said he didn’t expect the crypto industry to lose momentum even if the long-anticipated Clarity Act doesn’t pass the US Senate before its summer recess.
Although he feels congressional approval would lend legitimacy to digital assets, Hougan states that the industry is past the point of needing only congressional approval for regulatory progress to be made.
Given that the Senate would go into its summer break from August 10 until September 11, it left just a small window to have the Senate pass the Clarity Act before its legislative break.
As a result, the deadline has become a focal point for the digital asset industry, with many believing it represents a turning point in US crypto regulation.
The industry would still be able to “find a way forward”, Hougan said in a Tuesday blog post, even if lawmakers are unable to approve it this week.
He cited the Securities and Exchange Commission as a likelyby the bill
In particular, Hougan cited recent comments by SEC Chair Paul Atkins that the SEC is ready to implement rules dealing with key aspects of the digital asset marketplace.
The Bitwise executive added that the direct rules from the SEC are likely to be more favorable to innovation than legislation passed by Congress, at least in the near term.
He argued that even if any rules the commission put in place were to be rolled back by a less crypto-friendly chair in the event the U.S. presidential administration changes, it would be difficult to pull the industry back given the amount of institutional adoption seen to date.
As one argument, he cites how large financial institutions like BlackRock, the Nasdaq, JPMorgan and Visa have stepped up their engagement with blockchain technologies and digital assets.
Hougan further noted that the earliest any new administration could replace the SEC leadership would come too late, by which time the market would have matured beyond the possibility of rollbacks.
Should the Clarity Act fail to proceed before the recess, Hougan expects it will enter what he described as a “walking dead” phase, where it remains technically alive but would face an additional months-long delay before it could be considered again later in 2026 or as part of any potential year-end omnibus legislation.
Is The CLARITY Act About To Hit A Wall?
Senate Democrats expect the Clarity Act’s cloture vote to fail, Punchbowl News reports.
The bill needs 60 votes to advance toward final passage. Negotiations reportedly stalled over ethics provisions and bipartisan disagreements.… pic.twitter.com/BwJ8aGyQpE
— BSCN (@BSCNews) August 5, 2026
He also warned that this would lead to regulatory uncertainty, which may prevent institutions from investing in cryptoassets until a framework was established.
Within the prediction market Polymarket, there is a 23% chance that the Clarity Act will come into force by the end of 2026, down from 75% in mid-May.
Political issues nevertheless persist, including continued scrutiny from Democratic congressional lawmakers related to alleged conflicts between President Donald Trump and cryptocurrency, as well as efforts from several senators and tribal gaming regulators to amend the bill and exempt sports prediction markets.
Still, Hougan said congressional approval of the Clarity Act remained the preferred outcome, given it would give investors more protection, better define the regulatory landscape, and help the US compete in the fast-moving onchain economy.
