The crypto industry will need to become ingrained in everyday life in the US should Congress fail to pass a crypto market structure bill, or risk being set back by a change in administration, says Bitwise investment chief Matt Hougan.
Hougan said in a note on Monday that legislation making its way through the Senate to clarify how regulators police crypto “would cement the current pro-crypto regulatory environment into law.”
If the bill fails, Hougan said a future administration “could reverse today’s pro-crypto push,” and the industry will have three years, the end of President Donald Trump’s term (in 2029), to “make crypto indispensable to the everyday lives of regular Americans and the traditional financial industry.”
“If, at the end of three years, we’re all using stablecoins and trading tokenized stocks, we’ll get positive crypto legislation regardless of who is in charge. But if crypto is instead still operating on the edges, a change in Washington could be a huge setback,” he added.
Two Senate committees are pushing to mark up and pass crypto market structure legislation to clarify how the Securities and Exchange Commission and the Commodity Futures Trading Commission should approach crypto.
The markups have been plagued by delays as the Senate Banking and Agriculture Committees have both needed to garner bipartisan support for the bill, with lawmakers seeking to include ethics provisions and bans on stablecoin yields, among other requests.
Crypto on divergent paths depending on the bill’s fate
Hougan said that the fate of the crypto bill, whether it passes or fails to advance, will have “big implications for near-term price returns.”
“The result is two very different pathways for the market,” he said. “One is an early bull market built on strong expectations. The other is a ‘wait and see’ market where any optimism has to wrestle with prolonged regulatory grind and skepticism.”
If the bill passes, specifically a version “that the crypto industry is comfortable with,” then the market “will rally sharply,” Hougan said.
“With legislation in place, investors will assume that the growth of things like stablecoins and tokenization is guaranteed,” he added. “They’ll begin to build that future into prices today.”
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However, if the bill fails, then the future growth of the crypto industry will depend on real-world progress, Hougan said.
“Investors will demand that crypto prove real-world adoption before they begin to reward prices, because without that real-world adoption, crypto will be built on a regulatory foundation of sand,” he added.
Hougan was optimistic that Congress would pass crypto market structure legislation, saying the Trump administration has so far “delivered on its election promises to the crypto industry.”
“But if it doesn’t pass, I think we need to prepare for a slower ascent,” he said.
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