Crypto markets will continue advancing even if Congress fails to pass the Clarity Act before the Senate’s August recess, according to Bitwise Chief Investment Officer Matt Hougan.

In a Tuesday report, Hougan described this week as a critical period for the legislation, which seeks to establish a comprehensive US regulatory framework for digital assets and divide oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Hougan said senators would need to file for cloture by Wednesday for the bill to have a realistic chance of receiving a vote before lawmakers leave Washington. The Senate’s official schedule currently lists a state work period from August 10 through September 11.

Public Senate floor updates through Wednesday afternoon showed cloture filings for government funding legislation, a college sports bill, and several nominations, but did not list a filing for the Clarity Act. The bill could still return for consideration later in the year.

Hougan said the best outcome for the industry would be for Congress to pass the legislation, which he expects would support a new crypto bull market. However, he argued that missing this week’s deadline would not necessarily kill the bill.

Instead, the legislation could enter what Hougan called a “walking dead” phase, with supporters continuing to pursue passage when the Senate returns in September or through a broader legislative package later in the year.

The Clarity Act passed the House in July 2025 and advanced through the Senate Banking Committee in May 2026. It was placed on the Senate legislative calendar in June, making it eligible for floor consideration. The bill would still need to clear the Senate, be reconciled with other versions of the legislation, and receive presidential approval before becoming law.

Hougan said the extended uncertainty could keep some professional investors from committing capital to crypto. Those investors may remain cautious until they have greater visibility into whether the bill will pass and how its failure could affect markets.

However, he argued that a decisive reduction in expectations for passage could eventually benefit the market by removing uncertainty, even if crypto prices initially decline in response.

Hougan also said the industry would continue developing without congressional action because regulators could address many of the same issues through agency rules.

He pointed to comments from SEC Chair Paul Atkins, who said the agency was prepared to establish rules covering areas addressed by the Clarity Act. Hougan said an SEC led framework could be more favorable to crypto innovation in the near term, although it would be more vulnerable to reversal under a future administration.

Hougan argued that the continued expansion of tokenized assets, stablecoins, crypto exchange traded funds, blockchain based financial services, and federally regulated digital asset companies would make it increasingly difficult for future regulators to reverse the industry’s progress.

“Finance is moving onchain,” Hougan wrote, adding that the adoption of digital assets by major financial institutions would continue regardless of whether Congress acts before the recess.