With the probability plummeting to 23%, why is the crypto industry still irreversible?

According to Woofun AI, Bitwise Chief Investment Officer Matt Hogan made it clear that even if the Clarity Act comes to a standstill this week, the cryptocurrency industry's continued momentum will not be stopped as a result. Hogan believes that Washington is often slow to respond to major technological changes. The impact of this legislative delay is far below the severity of market concerns. The industry has accumulated enough momentum to go back to the vague regulatory past.

The current legislative process is facing serious time windows and probabilistic challenges. The Senate needs to push forward this landmark market structure bill before the August 5 summer recess, otherwise it may be postponed until next year due to the proximity of the November midterm elections. Market sentiment has cooled down significantly. Galaxy Research has lowered the probability of passing the bill in 2026 to 30%. Polymarket predicts that the chance of passing this year is only 23%, which is a sharp drop from 82% in February. On July 24, NYDIG Global Research Director Greg Cipolaro pointed out that although the latest draft is more complete, it lacks a cross-party path to secure 60 votes of support. Democratic lawmakers have refused to hold a final vote due to the White House's lack of progress on key issues such as cross-party ethics agreements, illegal financing, and stablecoin yields, leading to an impasse on the bill.

Data compiled by Woofun AI shows that if legislation fails, the industry will rely on alternatives from regulators, but its limitations are becoming increasingly prominent. Hogan speculates that the bill may be passed by bundling a “comprehensive bill” during the September or December congressional session. If this doesn't work, the market will continue to follow the joint interpretation issued by the US Securities and Exchange Commission and the US Commodity Futures Trading Commission in March. The document classifies Bitcoin and other assets as digital commodities, replacing the 2019 internal guidance document. US Securities and Exchange Commission Chairman Paul Atkins reiterated last week that institutions are capable of making relevant rules, but he also acknowledged that compared to comprehensive legislation, regulatory rules are less durable and vulnerable to court challenges or government changes. WisdomTree (WT.US) Chief Law Officer Ryan Loire warned during the July congressional hearing that the lack of clear legislation makes it impossible for market participants to predict applicable rules, seriously hindering the normal operation of the market.

Looking ahead, Hogan emphasized that during the two-and-a-half-year window before the new government comes to power, the industry will continue to accelerate development. While Washington's failure to pass legislation that strengthens investor protection and promotes new innovation is regrettable, this is not a referendum on cryptocurrency's status as a global financial infrastructure. This conclusion has long been established. Cryptocurrency has had a strong momentum to reshape the financial industry for decades, and regardless of short-term legislative results, its long-term evolution is irreversible.