Bitwise CIO warns failed crypto bill could trigger rough summer for markets

Bitwise chief investment officer Matt Hougan has expressed concern about Congress derailing the current momentum fueling the crypto industry. In a recent article, Hougan said the recent decision of nine Democrat senators to oppose the Stablecoin Act could affect the Bill’s progress.

According to Hougan, the decision of these Senators, most of whom supported the Bill when it passed in the Senate Banking Committee in March, is not a good sign. The senators claimed their opposition was because the proposed law did not have sufficient anti-money laundering provisions and said they would support the Bill once these concerns were addressed.

However, Hougan believes this is not the true reason for the change in tune and is mostly due to politics.

He said:

“The change in tune reflects the shifting political environment in Washington. The amended version of the Bill is stronger on AML/KYC and other items than the version passed out of the Banking Committee.”

Instead, the Bitwise executive believes that President Trump’s approval rating, which has been falling, and the concerns about conflict of interest due to Trump’s family affiliations with crypto businesses might be major reasons Democrats are holding back.

Nevertheless, Hougan believes the Stablecoin bill will still pass despite the current setbacks, noting that it is crucial enough to the US overall interest for politicians to look beyond partisan interests.

Stablecoin bill failure could hurt crypto

Meanwhile, the crypto executive warned that the continued growth of the crypto industry in 2025 depends on the passing of the Stablecoin bill. According to him, the industry now needs legislation to cement all the progress it has made during Trump’s administration, and the best chance currently is the Stablecoin bill.

Since Trump became President, the crypto sector has seen a flurry of positive developments, with the President fulfilling most of his campaign promises to industry. However, Hougan noted that almost all pro-crypto efforts have come from the White House, meaning another administration can reverse the gains.

In order to prevent this, Congress must pass a law that shows the progress of crypto. Hougan identifies stablecoin as a bi-partisan issue that should garner the support of everyone regardless of political affiliations.

He said:

“To move crypto forward, we need Congress to pass legislation enshrining crypto’s progress in law. Congress passing at least one crypto bill would show that Democrats and Republicans can align on crypto, making it more difficult for future regimes to undo progress.”

With uncertainties now surrounding the future of the legislation, the Bitwise executive stated that its failure could mark a rough summer for the crypto industry. However, he added that passing the Bill could also spur the bull market to a new level.

Interestingly, the Bitwise CIO believes current efforts on the Market Structure Bill could impact the success of the Stablecoin legislation. A draft of the Bill was introduced in the US House of Representatives on May 5, with many considering it a positive development. However, Hougan believes all crypto lobbying efforts should focus on the Stablecoin bill until it is passed.

House Democrats boycott joint hearing on crypto

Meanwhile, the opposition to the digital assets regulations among Democrats in the Senate appears to have spilled over to the House of Representatives. Democrats in the House recently walked out of a scheduled hearing to discuss crypto industry regulation.

Members of House Financial Services and Agriculture Committees were meant to hold a joint hearing titled “American Innovation and the Future of Digital Assets: A Blueprint for the 21st Century” on May 6 with witnesses including Coinbase executive Greg Tusar and ex-chair of Commodity Futures Trading Commission (CFTC) Rostim Benham.

However, Rep Maxine Waters, the highest-ranking Democrat on the Financial Services Committee, objected to the hearing, citing President Trump’s corruption due to his affiliation with the crypto industry.

The objection meant there was no unanimous consent, which is necessary for the joint hearing. Instead, the lawmakers have opted for an informal roundtable, with several Democrats leaving the roundtable to hold another hearing on Trump’s conflict of interest with the crypto industry.

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