# Bitwise CIO: Crypto Rally Can Continue Without Congressional Support Despite regulatory setbacks, institutional adoption drives crypto market momentum. - **Source:** [CryptoPotato](https://brifing.si/source/bd22636b-ec8d-42a8-8cca-1937c50e0f6c) - **Published:** 2026-09-18 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/f12e85e8-7c20-4576-a885-423f5f7e8ca3 ## CLARITY Act Fails in Senate The CLARITY Act, aimed at creating a regulatory framework for digital assets, failed to pass in the US Senate. This setback raises questions about the future of crypto regulation in the country. Despite this, Bitwise CIO Matt Hougan believes the broader crypto market rally remains intact. The legislation sought to strengthen investor protections and establish long-term rules, but its failure has not derailed institutional interest in crypto. ## Bitcoin's Rally Independent of Legislation Bitcoin's recent rally from $57,950 in July to over $80,000 in September occurred despite declining odds of the CLARITY Act passing. Polymarket odds for the bill fell from 39% to 18% during this period. Hougan argues that Bitcoin's recovery was driven by market dynamics rather than regulatory developments. This suggests that investors are not solely reliant on Congressional action for market confidence. ## Wall Street Moves Forward Major financial institutions continue to invest in crypto despite regulatory uncertainty. Robinhood launched its own blockchain, while Morgan Stanley introduced a Solana ETF. The Depository Trust Clearing Corporation (DTCC) completed its first batch of tokenized stock settlements. These moves indicate that Wall Street is not waiting for Congress to act, instead pushing forward with crypto integration independently. ## SEC Proposes New Rules In August, the SEC proposed Regulation Crypto Assets, aiming to address gaps in digital asset oversight. While agency rules can be reversed by future administrations, they provide interim guidance. However, Congress remains essential for granting the CFTC broader authority over spot crypto markets. This dual-track approach highlights the complexity of crypto regulation in the US. ## Market Reaction to Senate Vote Bitcoin experienced short-term price pressure following the Senate vote on the CLARITY Act. Despite this, Hougan views the setback as a speed bump rather than a roadblock. He notes that crypto has thrived for 17 years without core legislation, growing into a $2.5 trillion asset class. This resilience underscores the sector's ability to adapt to regulatory challenges. ## ETF Inflows Signal Confidence US-based Bitcoin ETFs returned to net inflows after two days of withdrawals, attracting over $159 million in a single day. BlackRock's IBIT led with significant inflows, while HYPE also recorded $4.25 million. Ethereum ETFs, however, saw $39.2 million in net outflows, extending their losing streak to three days. These mixed signals reflect varying investor sentiment across crypto assets. ## Institutional Adoption Drives Growth Hougan emphasizes that institutional adoption, not regulatory clarity, is the primary driver of crypto's growth. Major players like BlackRock and Morgan Stanley are actively integrating crypto into their offerings. This trend suggests that the market's momentum is fueled by practical applications and investment opportunities rather than legislative developments. ## Crypto's Long-Term Resilience Despite regulatory setbacks, crypto has evolved from a fringe idea to a transformative force in global finance. Hougan highlights its impact on payments and capital markets, noting its $2.5 trillion market cap. The sector's ability to thrive without core legislation demonstrates its resilience and adaptability, positioning it for continued growth regardless of Congressional action. ## Sources covering this story - https://cryptopotato.com/heres-why-bitwise-cio-believes-crypto-could-keep-rallying-without-congress/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._