Bitwise: The company holds 1.1 million Bitcoins; by 2029, they must prove their value or face being blacklisted.

Bitwise Q4 report shows that corporations hold 1.1 million Bitcoins, with 19 publicly listed companies entering the market. However, Chief Investment Officer Matt Hougan warns that the probability of the CLARITY bill passing has dropped from 80% to 50%, and cryptocurrencies have only three years to prove their indispensability; otherwise, they will face punitive legislation after 2029. Gold soaring past $5,000 indicates a collapse of trust, but regulatory uncertainty could stifle development.

The Institutional Surge Behind 1.1 Million Bitcoins

(Source: Bitwise)

The Bitwise report indicates that in Q4 2025, corporate Bitcoin holdings reached 1.1 million BTC, valued at $94 billion, with 19 new publicly listed companies joining. This milestone marks a key point in institutional adoption of Bitcoin, showing that corporate finances are increasingly viewing Bitcoin as a legitimate asset allocation option.

These 19 new entrants represent diverse industries, from tech firms to traditional financial institutions, beginning to recognize Bitcoin’s strategic value as a hedge against inflation and currency devaluation. The total holding of 1.1 million BTC accounts for approximately 5.2% of the total Bitcoin supply of about 21 million, demonstrating growing institutional confidence.

Despite Bitcoin experiencing significant volatility in Q4, with prices dropping nearly one-third from peaks above $125,000, a survey by Coinbase and Glassnode found that 70% of institutions still believe Bitcoin is undervalued. This optimism contrasts sharply with price fluctuations, indicating that institutional investors are making decisions based on long-term fundamentals rather than short-term price movements.

Bitwise’s Q4 2025 report suggests signs of a market bottoming out, citing Ethereum’s record trading volume, stablecoin market cap surpassing $300 billion, and Uniswap trading volume exceeding Coinbase. These indicators paint a contradictory picture: despite increasing regulatory uncertainty, infrastructure and adoption continue to grow steadily.

The 2029 Deadline: Show Me Proof Period

Hougan states that the cryptocurrency market faces a critical three-year window to demonstrate its practical utility in the real world, as legislative uncertainty could hinder industry momentum. He warns that if comprehensive regulation is not enacted, digital assets will be forced into what he calls the “show me proof” period.

By 2029, cryptocurrencies must become an integral part of everyday Americans’ lives and traditional finance, or they risk facing punitive legislation from future governments. This deadline is not arbitrary but based on the realities of the U.S. political cycle. After the 2028 presidential election, a new administration could hold entirely different views on crypto, and if cryptocurrencies remain on the fringes, regulatory environments could deteriorate rapidly.

Hougan points to historical examples where disruptive technologies, through widespread adoption, have changed regulations—Uber and Airbnb being prime examples—technologies so popular that legislators could not stop them. “If in three years we’re all using stablecoins and trading tokenized stocks, regardless of who is in power, we’ll see positive crypto legislation,” Hougan wrote in a client report on Monday. “But if cryptocurrencies remain on the fringes, any change in Washington could cause significant setbacks.”

This framework shifts the future of cryptocurrencies from regulatory debates to a race for market adoption. While legislative protections are important, establishing irreversible usage habits and economic reliance is even more critical. Once tens of millions of Americans use stablecoins daily for payments and hundreds of companies rely on blockchain settlement, regulators will lose the political capital needed to stifle the industry.

Regulatory Crisis: CLARITY Bill’s Drop from 80% to 50%

The urgency stems from the fragile regulatory foundation of cryptocurrencies, Hougan says, which could collapse without legislative protections. After recent setbacks—including Coinbase CEO Brian Armstrong’s public criticism (calling the current draft “disastrous”)—the likelihood of the CLARITY bill passing has fallen from 80% to about 50%, with a severe timetable emerging.

This warning is significant because progress in multiple congressional committees has stalled. After Armstrong withdrew Coinbase’s support, the Senate Banking Committee indefinitely delayed consideration of the CLARITY bill, shifting focus to housing affordability legislation pushed by President Trump. Meanwhile, despite lacking Democratic support, the Senate Agriculture Committee continues to push alternative legislation, with a hearing scheduled for Thursday, but the upcoming government shutdown could disrupt the process.

Three Main Reasons for the CLARITY Bill’s Dilemma

Industry Divisions: Public criticism from major players like Coinbase has weakened the industry’s unified front.

Political Priorities: Issues like housing and credit card fees have diverted legislative attention, marginalizing crypto.

Bipartisan Breakdown: Lack of Democratic support and divisions within the Republican Party over specific provisions.

Senator Roger Marshall agreed not to propose a controversial credit card fee amendment during Thursday’s Senate Agriculture Committee hearing, removing a threat to Republican support for the crypto legislation. White House officials are directly involved in blocking the amendment’s consideration, sources confirm, as its passage could jeopardize the broader legislative effort. This behind-the-scenes power play shows that crypto regulation has become a bargaining chip in wider political negotiations.

Like many other institutions, investment bank TD Cowen warns that, as lawmakers prepare for midterm elections, relevant legislation could be delayed until 2027, with full implementation possibly pushed back to 2029. This means the crypto industry may continue operating in regulatory gray areas for years, with this uncertainty suppressing institutional adoption and increasing compliance costs.

Gold Surges Past $5,000 Revealing a Collapse of Trust

Hougan links the regulatory challenges facing cryptocurrencies to the astonishing rise of gold prices past $5,000 per ounce, suggesting both reflect a waning confidence in centralized institutions. Gold rose 65% in 2025 and another 16% in 2026, and despite its millennia-long history as a store of value, nearly half of its dollar value was created in just 20 months.

“This indicates that people no longer want to store all their wealth relying on others’ benevolence,” Hougan writes, noting that after the U.S. froze Russian sovereign debt assets in 2022, central banks worldwide doubled their annual gold purchases. German economists recently urged repatriating gold stored at the Federal Reserve Bank of New York, and a Norwegian government panel warned that in the current geopolitical environment, sovereign wealth funds face “tax increases, regulatory interventions, and even confiscation.”

This trust collapse creates a historic opportunity for Bitcoin. As institutional trust declines, the core functions of cryptocurrencies could become increasingly valuable. Assets like Bitcoin enable ownership without centralized intermediaries, while networks like Ethereum and Solana operate under rules that no single entity can change. These censorship-resistant and decentralized features, in an environment of rising geopolitical uncertainty, will shift from theoretical advantages to practical necessities.

If the CLARITY bill passes, Hougan expects markets to surge significantly, as investors incorporate the assured growth brought by stablecoins and tokenization into prices. If it fails, a “wait-and-see” market will emerge, with optimism battling long-term regulatory uncertainty. Bitwise’s analysis indicates that these two paths will determine over the next three years whether Bitcoin becomes a mainstream financial asset or reverts to the fringes.