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Key Takeaways
- The CLARITY Act passing could drive a market surge for Bitcoin and crypto, according to Bitwise’s Matt Hougan.
- Hougan argues that Bitcoin’s cyclical patterns are less relevant in 2026.
- The CLARITY Act aims to define which digital assets fall under the SEC or CFTC.
Industry leaders are increasingly focusing on the potential market impact of the upcoming CLARITY Act.
Some suggest it could end the long-running “crypto winter” and drive Bitcoin (BTC) and other crypto to new all-time highs.
Matt Hougan, chief investment officer at Bitwise Asset Management, also argued that Bitcoin’s four-year cycle has finished, claiming its fundamentals lead in front of its price for the first time in history.
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CLARITY Act Passing Will Have Major Impact
Hougan weighed in on X on Monday, comparing the legislation to the famed groundhog that predicts the arrival of spring.
“The CLARITY Act is the Punxsutawney Phil of this crypto winter,” Hougan wrote.
“If it sticks its head out but fails in Congress, the winter could continue. If instead it passes and is signed into law, we’re heading to new all-time highs,” he added.
Polymarket traders appear optimistic about the bill’s chances, assigning an 80% probability that the legislation will be signed into law this year.
Why Is The Clarity Act So Important?
The CLARITY Act, introduced in May 2025 by a bipartisan group of House lawmakers, seeks to resolve long-standing regulatory uncertainty in the U.S. crypto market.
According to the CCN Education Team, the bill is designed to clarify when digital assets should be treated as securities by the Securities and Exchange Commission (SEC) and when they fall under the Commodity Futures Trading Commission (CFTC).
The legislation cleared the House last year and is currently progressing through the Senate, with markups expected this week.
If enacted, the CLARITY Act would assign the CFTC a central role in overseeing digital commodities—including spot markets, exchanges, brokers, and dealers.
Meanwhile, the SEC would maintain authority over securities-related activity and certain primary-market fundraising mechanisms.
Proponents say this clear division of responsibilities could provide much-needed regulatory certainty for investors.
Bitcoin’s Four-Year Cycle No More?
Hougan elaborated on the broader Bitcoin market during an interview on the Investopedia podcast, arguing that traditional cyclical patterns may no longer dictate price movements.
“Historically, Bitcoin has moved in this four-year cycle, three big up years and a pullback here… the next would be 2026, so according to the four-year cycle, this would be a negative year for Bitcoin,” he said.
“Why do I think that won’t happen? Well… the halving is no longer very important. There’s just not that much more Bitcoin being produced.”
Hougan added there are huge positive forces at play for Bitcoin, arguing that Bitcoin’s fundamentals for the first time outweigh its price.
“Institutional adoption… regulatory progress… Those are decade-long trends, and I think the bullish trends are just more powerful than the historical four-year cycle,” he said.
“I think it’s an incredibly attractive market for Bitcoin… one of the few times in its history, I think the fundamentals are ahead of the price.”
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