Bitwise warns crypto has three years to become indispensable as Clarity Act stalls

Crypto asset manager Bitwise warned in a Monday blog post that the industry faces a critical fork in the road as support for the Clarity Act stalls, arguing it has roughly three years to become indispensable before political winds could shift, according to Bitwise CIO Matt Hougan.

Hougan said the Clarity Act is essential to convert the current pro-crypto regulatory environment into permanent law and that without it the industry remains vulnerable to future administrations. Market sentiment about the bill’s chances has soured: Polymarket traders in early January priced in an 80% chance of passage, but those odds have fallen to roughly 50% after figures including Coinbase CEO Brian Armstrong called the current draft unworkable.

Armstrong said his firm pulled support after finding provisions that could have harmed consumers and stifled competition. Bitwise argued that if legislation stalls the industry must follow the path of disruptive firms that became too popular for lawmakers to ignore, and that it has about three years to make stablecoins and tokenized assets indispensable to the U.S.

economy. The firm outlined two possible market paths: a sharp rally if a workable Clarity Act passes, or a prolonged "wait and see" market with capped price appreciation if the bill fails. Wall Street broker Benchmark said a legislative failure would delay but not derail crypto’s maturation, leaving the U.S.