Matt Hougan, Chief Investment Officer of Bitwise, a crypto asset management company, stated that if the Clarity Act, aimed at creating a regulatory framework for the cryptocurrency market in the United States, is not passed this week, it could lead to a short-term downturn in the cryptocurrency market.
In a statement on this issue published in the Bitwise CIO memo, Hougan noted that if the bill is not passed, the most positive scenario for the market would be for investors to quickly factor this possibility into their calculations.
Hougan said that a significant reduction in expectations regarding the likelihood of the Clarity Act's passage, particularly in the Polymarket sector, could help reduce regulatory uncertainty in the market.
Hougan made the following statements:
"If Clarity does not pass scrutiny this week, at best, the probability of a significant drop in prediction markets to at least 10% would allow us to get rid of this uncertainty. In such a scenario, the market may briefly wobble, but it would put us in a more favorable position for an upward trend in the fall."
According to the Bitwise representative, while the best scenario for the market would be for the bill to pass this week, this appears unlikely. Hougan stated that a more likely scenario is the postponement of Senate hearings to September, and current events point precisely to that.
Hougan said the key point is for investors to come to terms with the fact that the Clarity Act will not be passed in the short term.
"I was hoping the market would quickly price this in, and Clarity would acknowledge that it's not happening now. This would help the market reach a bottom and eliminate uncertainty."
*This is not investment advice.
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