With the US Senate's August 7th recess deadline approaching, a key piece of legislation is facing a tight window for passage. However, Matt Hougan, Chief Investment Officer of crypto asset management giant Bitwise, has stated clearly that even if the bill fails to pass this week, the cryptocurrency industry will continue to advance.

Legislation May Languish, SEC Emerges as Strong Backup

Hougan noted that if the bill misses this week's deadline, it won't completely die. Instead, it would enter a "walking dead" state. The market might continue to debate "hitching a ride" on omnibus bills in September or December. However, he believes this prolonged uncertainty is more damaging to the market than outright failure, as it keeps professional institutional investors on the sidelines. Currently, the prediction market Polymarket shows the bill's passage probability has plummeted from 82% in February last year to 27%.

Facing the legislative deadlock, the US Securities and Exchange Commission (SEC) is becoming the industry's "true backup." SEC Chairman Paul Atkins has previously stated that the SEC is "ready, willing, and able to issue regulatory rules to address the same issues as the CLARITY Act." Hougan believes that under Atkins' current leadership, the SEC's regulatory rules could be more favorable to the crypto industry than the bipartisan bill in Congress, potentially acting as a short-term catalyst for the industry.

The "Pandora's Box" is Open, Institutional Adoption is Unstoppable

Although the SEC's administrative rules could be overturned by future administrations, Hougan emphasized that the industry has at least a two-and-a-half-year window to solidify its position. By that time, any new SEC chairman would be unable to reverse the trend. He cited the 1994 US telecommunications reform bill as an example, which passed the House overwhelmingly but stalled in the Senate. Yet, internet development did not halt; Netscape, Amazon, and eBay emerged, eventually leading to the smooth passage of the 1996 Telecommunications Act. Hougan believes the crypto industry is at a similar historical inflection point.

Today, BlackRock's most profitable ETF is the Bitcoin ETF. Nasdaq and JPMorgan are aggressively pushing asset tokenization. Visa, Mastercard, and Stripe are partnering with Coinbase to build stablecoin platforms. Robinhood has also launched its own blockchain to connect with DeFi applications. Additionally, the Office of the Comptroller of the Currency (OCC) has granted trust charters to institutions like Circle, Ripple, and Paxos. "Washington's dysfunction is real, but this is not a referendum on cryptocurrency's status as a global financial infrastructure," Hougan concluded. "That ship has already sailed."