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Matt Hougan, Chief Investment Officer at crypto asset management company Bitwise, said that if the Clarity Act, which aims to create a regulatory framework for the crypto market in the US, is not passed this week, there could be a short-term downturn in the cryptocurrency market.
In a memo regarding the issue, Bitwise CIO Hougan stated that if the bill fails, the most positive scenario for the market would be for investors to quickly price in this possibility.
Hougan stated that the significant decrease in expectations regarding the likelihood of the Clarity Act passing, particularly in the Polymarket sector, could help reduce regulatory uncertainty in the market.
Hougan made the following statements:
“If Clarity doesn’t pass this week, the best thing that could happen is that the probability of prediction markets dropping significantly to at least 10% would allow us to leave this uncertainty behind. In such a scenario, the market might stumble briefly, but this would put us in a better position for an uptrend in the fall.”
According to the Bitwise executive, while the best-case scenario for the market would be the bill passing this week, that seemed unlikely. Hougan stated that a more probable scenario was the Senate hearings being postponed until September, and current developments were pointing in that direction.
Hougan said the key point was for investors to accept that the Clarity Act would not be accepted in the short term.
“I was hoping the market would price this in quickly and accept that Clarity isn’t going to happen right now. This would help the market bottom out and remove the uncertainty.”
*This is not investment advice.
coindesk.com
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