Crypto asset manager Bitwise has urged the industry to achieve mass adoption within three years if federal legislation like the Clarity Act fails to pass. The firm highlighted falling support for the bill amid industry pushback and a postponed Senate hearing. Without becoming indispensable, crypto risks regulatory setbacks from future political shifts.
The digital asset industry stands at a crossroads, according to Bitwise, a prominent crypto investment firm. In a blog post published on Monday, Chief Investment Officer Matt Hougan emphasized the urgency of securing regulatory clarity through the Clarity Act, a proposed bill aimed at establishing a framework for crypto market structure.
Hougan noted that sentiment around the bill's passage has deteriorated. Early January Polymarket odds gave it an 80% chance of becoming law, but those figures have dropped to about 50% following criticism from industry leaders. Coinbase CEO Brian Armstrong, for instance, withdrew his company's support, stating that the draft contained provisions that "could have harmed consumers and stifled competition."
Compounding the uncertainty, the Senate Agriculture Committee delayed its markup hearing on the bill from Monday to Thursday, attributing the postponement to a winter storm affecting much of the United States.
Hougan argued that without the Clarity Act, the pro-crypto stance of the current administration could evaporate under future leadership, leaving the sector exposed. He drew parallels to companies like Uber and Airbnb, which thrived by gaining widespread popularity despite initial regulatory ambiguity. Bitwise estimates the industry has roughly three years to integrate stablecoins and tokenized assets deeply into the American economy, making them too vital to regulate harshly.
The firm outlined two potential market trajectories. Passage of a viable bill would likely trigger a "sharp rally" as investors anticipate expanded blockchain applications. Failure, however, would usher in a cautious "wait and see" environment, with growth tempered by skepticism and dependent on demonstrated utility.
Wall Street analyst firm Benchmark echoed this view, suggesting that legislative delays would hinder U.S. crypto's full potential, pushing investors toward safer assets like bitcoin over riskier areas such as exchanges and decentralized finance.
