CLARITY Act becomes crucial: How Bitwise views the two scenarios of new highs in the crypto market

The future of the crypto market may really depend on a bill. Bitwise Chief Investment Officer Matt Hougan used a clever analogy: the CLARITY bill is like “Groundhog Phil” in this crypto winter. If it only peeks out but fails to pass through Congress, the winter may continue; but if it passes smoothly and is signed into law, the crypto market is likely to hit new all-time highs. This is not just simple optimism but based on the actual impact of regulatory certainty on the market.

Why the CLARITY Bill is So Important

Regulatory Certainty Gap

The core value of the CLARITY bill lies in providing a clear regulatory framework for crypto assets. The biggest uncertainty facing the current crypto market is unclear rules—questions like which department should regulate certain assets, what are the trading rules, and how institutional investors can comply—these issues have long lacked definitive answers.

According to relevant information, this bill could become a significant catalyst for the development of mainstream assets like Ethereum and Solana. More importantly, it provides the necessary certainty foundation for institutional adoption of cryptocurrencies.

Real Signals of Institutional Adoption

Hougan’s judgment is not made out of thin air. Look at the current data:

• Solana spot ETF’s single-day net inflow has reached $10.67 million (January 12), and Bitwise’s BSOL has a total historical net inflow of $657 million
• XRP spot ETF’s weekly net inflow last week was $38.07 million
• Harvard University’s endowment fund has started allocating to Bitcoin, with a Bitcoin-to-gold allocation ratio of 2:1

All these indicate that institutional funds are continuously flowing in. If the CLARITY bill passes, it will further dispel institutional investors’ doubts.

Market Impact of Two Scenarios

Scenario 1: The Bill Fails to Pass

If the CLARITY bill stalls in Congress, the market may face:

• Continued regulatory uncertainty, slowing institutional adoption
• Repeated policy risks, increased market volatility
• Lack of policy support for innovative applications like asset tokenization, limiting development
• Existing ETF inflow momentum may weaken

Scenario 2: The Bill Passes Smoothly

If the bill is successfully enacted, based on analysis, the market could receive multiple catalysts:

• Clear rules will stimulate large-scale institutional allocations
• The potential of asset tokenization will be unleashed, creating new market opportunities
• Mainstream assets like Ethereum and Solana will gain policy support, attracting more funds
• Overall liquidity in the crypto market will increase, pushing prices to new highs

Current Key Signals

Bitwise’s own actions also reflect the company’s emphasis on the CLARITY bill. Recently, Bitwise’s CEO announced a meeting with a central bank to discuss Bitcoin, indicating that policy progress is no longer just a U.S. issue. Meanwhile, continuous inflows into several spot ETFs from Bitwise also reflect institutional investors’ optimistic outlook on policy prospects.

Additionally, it’s reported that Bitwise and Canary Capital have applied for a Sui spot ETF, and Grayscale is pushing for a Hyperliquid spot ETF. The concentrated launch of these institutional-grade products itself indicates market expectations for clearer policy frameworks.

Summary

The significance of the CLARITY bill goes beyond mere regulation. It represents a key milestone in the crypto market’s transition from the gray area to normalization. Hougan’s “groundhog prediction” captures the core logic of the current market: policy certainty determines the flow of institutional funds.

The current trend of institutional adoption is already evident—continuous ETF net inflows, traditional institutions starting to allocate, and policymakers actively communicating. If the CLARITY bill passes smoothly, these trends may accelerate. Conversely, the market will need to wait for the next policy signal.

Future focus points include: the progress of the bill in Congress, the speed of institutional adoption, and the performance of mainstream assets (especially ETH and SOL) after policy certainty is enhanced.