The CLARITY Act's prospects remain uncertain as the U.S. Senate has only days remaining to take up the crypto market structure bill — which would establish a formal framework dividing oversight of digital assets between the SEC and CFTC based on a token's degree of decentralization — before departing for its summer recess on August 5. The bill represents Congress's most significant attempt to resolve a regulatory ambiguity that has persisted since at least 2019, when the SEC first issued guidance classifying most tokens as securities. While the moment is widely regarded as pivotal for the digital asset sector, Bitwise Chief Investment Officer Matt Hougan does not believe that the bill's failure to advance will halt the industry's continued growth.

In an article published Wednesday, Hougan acknowledged that the legislation could enter a "stalled period" if it does not move forward, but he argued that such a delay would not prevent the long-term expansion of digital assets.

Bitwise: Crypto Has Already Reached a Turning Point

Hougan noted that despite this week being viewed by many as a critical juncture for the CLARITY Act, the cryptocurrency ecosystem has progressed too far to lose momentum now. He observed that Washington, D.C. has historically been slow to respond to technological shifts, yet innovation has continued regardless.

The Senate faces mounting pressure to pass the bill before members leave for the summer break. Failure to do so would push the legislation to the sidelines as Congress turns its attention to the upcoming November midterm elections, a cycle in which both parties have actively courted digital asset industry support.

Chances of Passage This Year Continue to Decline

Optimism surrounding the CLARITY Act has dimmed considerably. Galaxy Research has reduced its probability of approval in 2026 to 30%. On Polymarket, the likelihood of passage by 2024 has fallen from 82% to 23%.

Greg Cipolaro of NYDIG noted that while the revised bill represents an improvement, it still lacks sufficient bipartisan support to secure the 60 votes needed for cloture in the Senate.

According to Punchbowl News, citing sources, Senate Democrats will oppose the bill unless negotiations resume on issues including ethics regulations, anti-illicit finance measures, and stablecoin yields.

Senator Cynthia Lummis (R-WY) urged her Democratic colleagues to reconsider in a post on X:

Senate Democrats should think hard before killing a bipartisan Clarity Act — 11 months in the making. It protects consumers, arms law enforcement, keeps this industry in America, and includes a historic ethics agreement covering the President, VP, Congress & federal judiciary. — Senator Cynthia Lummis (@SenLummis) August 4, 2026

Delayed Bill Could Return Later This Year

If the bill does not pass in the coming days, Hougan described it as becoming "a walking dead." However, he believes Congress could revisit the issue in September or during the annual lame-duck session, when multiple pieces of legislation are often combined into a single omnibus spending bill.

Should the CLARITY Act fail to win Congressional approval this year, Hougan noted that the cryptocurrency industry would continue operating under the joint interpretation issued by the SEC and CFTC in March. That interpretation classifies Bitcoin and other assets as digital commodities, superseding the SEC's prior 2019 guidance.

SEC Chairman Paul Atkins indicated last week that the commission is prepared to issue additional regulations covering areas similar to those addressed by the CLARITY Act. However, Atkins emphasized that only Congress can provide lasting legal certainty, since regulatory guidelines can be legally challenged or reversed.

Ryan Louvar, Chief Legal Officer at WisdomTree, echoed that concern, stating that relying solely on regulators creates uncertainty and leaves companies without clear guidance on applicable rules.

Bitwise Remains Confident in Crypto's Trajectory

Despite the legislative ambiguity, Hougan asserted that the industry is in a strong position. He suggested that the current policy environment gives the sector sufficient runway to grow before a new administration could alter course.

While Hougan expressed disappointment over Congress's inability to pass industry-benefiting legislation, he remains confident that cryptocurrency's role in the financial system is now firmly established. In his assessment, the industry's growth has reached a point where it will play a significant role in the future of finance, regardless of whether the CLARITY Act advances in the coming days.