The crypto bull market does not need permission from Washington.

Written by: Matt Hougan, Chief Investment Officer of Bitwise

Translated by: Chopper, Foresight News

Yesterday, the CLARITY Act failed to pass. The bill required 60 votes to advance in the Senate but ultimately received only 49 votes. All Democratic senators and some Republican senators voted against it.

This is undoubtedly a regrettable event. The CLARITY Act itself is a high-quality piece of legislation that could have strengthened investor protection and established a regulatory framework for the crypto industry that could remain effective across multiple administrations.

The most immediate question is whether the failure of the CLARITY Act will end the crypto bull market that began in early July?

Back in January, I referred to the CLARITY Act as "Groundhog Day" for the crypto industry and predicted that if the bill faltered, the market would face six weeks of winter. By this reasoning, the market would be in a state of severe volatility before the midterm elections.

However, I now believe that this is no longer the most likely scenario. On the contrary, I suspect that the impact of the CLARITY Act's failure is far less severe than the current news headlines suggest.

What changed my mind is the chart below.

Comparison chart of CLARITY Act passage probability and Bitcoin price, data source from Polymarket and CoinGecko, statistical period: July 1, 2026 — September 15

The current crypto bull market started on July 1, when Bitcoin bottomed out at $57,950, and subsequently rose, peaking above $80,000 on September 4. During the same period, Polymarket predicted the probability of the CLARITY Act passing this year fell from 39% to 18%. If the bull market depended on the passage of the CLARITY Act, then the declining probability should have been accompanied by a drop in coin prices, but the market exhibited a completely opposite trend.

One reason behind this is that Wall Street did not wait for the CLARITY Act to be passed before entering the crypto asset market. Over the past quarter, Robinhood launched its own blockchain, Morgan Stanley launched a Solana ETF, and the DTCC completed its first tokenized stock trading settlement. These institutions acted boldly because the current regulatory climate from the SEC and CFTC is friendly to crypto, and this situation is expected to last until 2029. They do not need the CLARITY Act because the market already has clear regulatory expectations.

In the coming days, investors will gradually understand this reality. The crypto industry has entered a situation of "regardless of good or bad outcomes, we can benefit" in terms of regulation. Before the new government in Washington takes office, the SEC and CFTC have the autonomy to set the regulatory agenda for the crypto industry.

SEC Chairman Paul Atkins stated that the SEC "is prepared and willing to issue rules to address the same issues that the CLARITY Act aimed to tackle." This is not mere rhetoric; the SEC proposed the "Regulation Crypto Assets" in August. CFTC Chairman Mike Selig also mentioned that the CFTC has prepared relevant regulatory details. Just this morning, he reiterated that the CFTC "has clear goals and is ready to roll out regulatory rules for this new field of finance."

The next government could overturn these regulatory regulations, and only Congress can grant the CFTC full jurisdiction over the spot market. However, apart from that, the regulatory rules developed under the leadership of Atkins and Selig will likely have a more favorable stance for the crypto industry than the CLARITY Act itself. I suspect that the current market lull will persist until Atkins and Selig announce the next batch of industry regulatory proposals.

I do not want to be blindly optimistic about this matter. If the CLARITY Act passes smoothly, it would certainly be better; crypto assets would become a consensus allocation for investors in the fourth quarter, and prices would almost certainly rise significantly.

The reality is that Bitcoin fell about 4% yesterday, which is a reasonable reaction; certainly, part of the decline is also due to market concerns about interest rates and oil prices. There will be more speed bumps ahead for the bull market.

However, in my view, the ultimate direction will not change, and the core reason is that excellent builders possess strong resilience.

For the first 17 years after its inception, the crypto industry had no dedicated core market legislation. Even without the CLARITY Act, it has grown from a fringe concept into a $25 trillion asset class, reshaping every aspect from global payments to capital markets, attracting hundreds of millions of investors, and being accepted by leading financial institutions worldwide.

I believe that when we look back on this setback of the CLARITY Act in the future, we will reach a clear conclusion: the crypto industry always finds a way to continue building.