The U.S. Senate's September 15 failure to advance the Clarity Act has triggered a rally that suggests crypto traders prefer faster agency rulemaking to long-term legislative certainty, according to Bitwise Chief Investment Officer Matt Hougan.

The procedural vote fell short of the 60 votes needed to proceed, stalling one of the industry's top legislative priorities ahead of the midterm elections. In the weeks since, Bitcoin has risen roughly 8% and Ether 7%, per Hougan's weekly memo. Tokens including NEAR, Uniswap and Avalanche posted substantially larger gains.

"Crypto sacrificed long-term certainty and got better rules, faster," Hougan wrote.

What does the bill's failure actually change?

Hougan highlighted four areas where federal agencies moved more quickly than Congress would have, in ways that favor large incumbents over theoretical new entrants.

• Stablecoin rewards. The GENIUS Act prohibits stablecoin issuers from paying yield on reserves but is silent on rewards paid by intermediaries. Clarity Act drafts had sought to close that gap amid bank concerns about deposit competition. Without a fix, Hougan argued, platforms such as Coinbase retain room to fund user acquisition with stablecoin rewards.
• Exchange licensing. Clarity would have built a comprehensive federal market structure for digital assets, lowering entry barriers for newer venues. Its stall preserves the moat enjoyed by established exchanges that already operate under state licenses, Hougan said.
• Tokenized equities. Two days after the Senate vote, the SEC granted a five-year conditional "innovation exemption" letting qualifying venues trade tokenized US-listed stocks through permissioned automated market makers and liquidity pools without registering as national exchanges. Certain liquidity providers also received conditional dealer-registration relief.
• Token buybacks. On September 25, SEC staff clarified that announcing a buyback program for a non-security crypto asset does not by itself supply the "essential managerial efforts" element of a Howey-test investment contract.

Which protocols benefit from the buyback guidance?

Hougan flagged Hyperliquid, NEAR and Uniswap as protocols that route revenue toward token supply mechanisms. The staff guidance does not carry the force of law and remains reversible, he noted, but in the near term it lowers the compliance bar for revenue-generating tokens listed across major venues.

What is the durability tradeoff?

Agency interpretations and conditional exemptions can be undone by future administrations in ways that statutes cannot, Hougan acknowledged. JPMorgan analysts struck a similar note, writing that rules issued by the SEC and CFTC lack the durability of legislation because future administrations can revise them and courts can challenge them.

Hougan countered that deepening adoption by traditional financial institutions could make a wholesale reversal politically difficult over time. The market structure fight now heads into the midterm cycle with the industry's largest bill on hold, while the SEC's five-year tokenization exemption sets a defined experimental runway in the interim.