Bitwise Chief Investment Officer Matt Hougan argues that the Senate's failure to advance the Clarity Act left the crypto industry without statutory certainty but delivered faster, more favorable rules from regulators — a trade-off he says explains the market's rally since the Sept. 15 vote.

In a memo posted Wednesday, Hougan addressed a question that has puzzled both crypto skeptics and supporters: why did the market rally after the Clarity Act stalled in the Senate? The Senate rejected a motion to advance the bill on Sept. 15, with 49 senators voting in favor and 50 against.

Many observers expected the vote to erase much of the crypto market's rebound from the month prior. The opposite happened. Bitcoin (BTC) is up nearly 11% since the vote, while ether (ETH) has added roughly 12%, with smaller tokens posting larger gains. Total crypto market capitalization sits at roughly $2.95 trillion, up nearly 11% from $2.65 trillion on Sept. 15.

Better rules, faster

Hougan's core argument is that the industry traded long-term statutory certainty for near-term regulatory wins that he views as more favorable than the bill itself.

Stablecoin rewards are his first example. The final version of the Clarity Act would have barred platforms from paying customer interest or yields on stablecoin balances. With the bill stalled, exchanges like Coinbase remain free to offer rewards programs under the existing GENIUS Act framework.

He also sees established exchanges as beneficiaries. Clarity would have created a national licensing path that could make it easier for would-be rivals to enter the market, while restricting firms that combine exchange and brokerage services under one roof.

On tokenization, regulatory momentum came quickly. The Securities and Exchange Commission issued a five-year "innovation exemption" just days after the Senate vote, on Sept. 17, allowing limited trading of tokenized U.S. stocks through on-chain platforms.

SEC staff followed with additional guidance last week for projects that buy back their tokens. An updated FAQ, published Sept. 25, said announcing a buyback for an already functioning crypto network would not by itself make a token sale an investment contract.

The Commodity Futures Trading Commission has also stepped in with measures Hougan considers more favorable than the bill, filling the void Congress left.

The certainty gap

The risk Hougan flags is structural: because Congress never locked these rules into law, a future administration could reverse course. Agency-level measures — exemptions, staff guidance, FAQs — carry less durability than federal statute and can be withdrawn or rewritten with each change in leadership.

That fragility cuts both ways. The same SEC that granted the innovation exemption and blessed token buybacks could tighten those positions under different leadership, leaving platforms that built products on top of them exposed.

For now, Hougan sees the balance as favorable. "Crypto sacrificed long-term certainty and got better rules, faster," he wrote.

The question ahead is whether that bargain holds. Tokenized equity trading under the innovation exemption and token buybacks under staff guidance now operate without congressional backing, and the market's post-Clarity gains rest on rules that remain subject to revision by the next administration.