The Clarity Act failed and cryptocurrencies emerged victorious, according to Bitwise

• The Clarity Act would have limited rewards on stablecoins paid by platforms.
• The market reacted to the failure with rises in bitcoin, ether, and several tokens.

The cryptocurrency market reacted with strong gains to the failure of the Clarity Act, a project that the industry itself had pushed for years to gain greater regulatory certainty. In an analysis published on September 30, 2026, Matt Hougan, Chief Investment Officer of Bitwise, argues that the collapse of the project ultimately benefited the sector by allowing for the adoption of more favorable and rapid rules in various areas.

Since the Senate vote, bitcoin (BTC) has risen 8% and ether (ETH) 7%, while some tokens recorded even greater advances. NEAR increased by 104%, Uniswap by 49%, and Avalanche by 43%. For Hougan, this behavior reflects that the market is reacting favorably to the measures adopted by regulators after the Clarity Act did not advance in Congress.

One of the main changes affects stablecoins. As reported by CriptoNoticias, the Clarity Act would have prohibited platforms from paying interest or yields on these assets, with penalties of up to USD 5 million for violations. With the project discarded, the GENIUS Act, approved in 2025, remains in effect, which prohibits these payments to issuers but does not impose the same restriction on exchange platforms. Hougan believes this leaves room to offer rewards on balances.

Exchanges also retained advantages over new competitors. The Clarity Act would have created a national license for these platforms and limited the combination of exchange and brokerage services. Without that reform, established companies like Coinbase and Kraken maintain their position against potential traditional participants.

The failure of the Clarity Act leaves cryptocurrencies in a better position than they would have had with the project approved. The industry supported the law for the certainty it promised, but had to concede on several points during negotiations. After its failure, regulators have adopted measures more favorable to cryptocurrencies than those contemplated by the project itself.

Matt Hougan, Chief Investment Officer of Bitwise.

In tokenization, the change was more immediate. Two days after the project's failure, on September 17, the U.S. Securities and Exchange Commission (SEC) temporarily authorized the trading of tokenized U.S. stocks through automated liquidity funds and with authorized participants. The measure is valid for five years, is limited to certain stocks, and sets volume caps.

Hougan also highlights tokens that use the revenues from their protocols to buy back units. Hyperliquid advanced 15%, Lighter 10%, and Pump 19% since the vote. The SEC also clarified that when a network is already functioning, announcing a buyback program does not, by itself, turn the token into a security.

However, the cost of this scenario is the lack of long-term legislative protection. Hougan warns that a new administration in 2029 could change the direction of the SEC and the Commodity Futures Trading Commission (CFTC). For now, the sector faces a dilemma: to operate under more flexible rules but subject to political changes, while large financial institutions advance in their incorporation of digital assets. The evolution of those investments over the next few years will be key to determining how much of this regulatory framework can be consolidated beyond the current administration.

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