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<h2 id="header-0">Crypto News</h2>
Bitwise Chief Investment Officer Matt Hougan says the crypto market benefited from the CLARITY Act's failure in the Senate, arguing that regulators have since moved faster on several fronts than the bill itself would have allowed.
The Senate rejected a motion to advance the CLARITY Act on Sept. 15, with 49 votes in favor and 50 against. Many expected the setback to erase the market gains made in the month before the vote. Instead,<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/currencies/bitcoin/"> Bitcoin</a> (BTC) has risen nearly 11% since the vote, and<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/currencies/ethereum/"> Ethereum</a> (ETH) has gained roughly 12%, with some smaller tokens posting far larger increases.
Hougan laid out his reasoning in a<a target="_blank" rel="noopener noreferrer nofollow" href="https://experts.bitwiseinvestments.com/cio-memos/why-crypto-rallied-when-clarity-failed"> memo</a> published Sept. 30. He said that while the crypto industry did not get the certainty a federal law would have provided, it also avoided compromises in the bill that would have limited parts of the industry.
<img src="https://academy-public.coinmarketcap.com/optimized-uploads/c33c989f4010431894e9824afc5482aa.png">
<h2 id="header-1">Stablecoin Rewards and Exchange Rules</h2>
One example involves stablecoin interest payments. Hougan said the CLARITY Act's final text would have barred platforms from paying interest or rewards on<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/glossary/stablecoin"> stablecoin</a> balances in any form, with penalties of up to $5 million per violation. Because the bill failed, the GENIUS Act remains the governing law, and it restricts only stablecoin issuers from paying interest, not exchanges. Hougan named Coinbase as a beneficiary, since it uses stablecoin rewards to attract customers.
The bill would also have created a national license for spot crypto exchanges, making it easier for new entrants to compete with established players. Without it, Hougan said, exchanges such as Coinbase and Kraken keep their existing advantage under the current state-by-state licensing system.
<h2 id="header-2">Faster Rules for Tokenized Stocks</h2>
Regulators have also acted on tokenization. Two days after the Senate vote, the Securities and Exchange Commission issued a five-year order letting<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/glossary/tokenized-securities"> tokenized securities</a> of listed US stocks trade through permissioned venues, without those venues needing to register as exchanges. The order is limited to listed US stocks and caps the trading volume each venue can handle. Hougan said the CLARITY Act would have directed the SEC to study the issue first, a process he said could have taken years before any rules were written.
Hougan pointed to revenue-generating tokens as another area that benefited.<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/currencies/near-protocol/"> NEAR Protocol (NEAR</a>),<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/currencies/uniswap/"> Uniswap</a> (UNI), and<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/currencies/avalanche/"> Avalanche</a> (AVAX) were among the tokens that rose sharply after the vote, alongside Hyperliquid (<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/currencies/hyperliquid/">HYPE</a>) and other projects that use protocol revenue to buy back their own supply. Hougan said the CLARITY Act left it unclear whether a buyback could push a token from<a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/glossary/digital-commodity"> digital commodity</a> status back into being treated as a security.
Related Article: <a target="_blank" rel="noopener noreferrer nofollow" href="https://coinmarketcap.com/academy/article/bitwise-closes-doge-etf-less-than-a-year-after-launch">Bitwise Closes DOGE ETF Less Than a Year After Launch</a>
The SEC resolved that question last week with an updated FAQ stating that announcing a buyback for an already functioning network does not by itself make a token sale an investment contract. Hougan called the agency's willingness to clarify its own guidance—once the CLARITY Act was no longer pending—a central reason the bill's failure worked out in the industry's favor.
Hougan acknowledged a risk in relying on regulatory action instead of a law passed by Congress. A new administration taking office in 2029 could appoint new leadership at the SEC and the Commodity Futures Trading Commission, and that leadership could reverse the current approach. He said he is not overly concerned, arguing that major financial institutions’ continued adoption of blockchain technology over the next several years would make a sharp policy reversal more difficult to carry out.

CLARITY Act Failure Gave Crypto 'Faster' Wins, Bitwise Says

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