CLARITY Act Failure Hands Coinbase a Stablecoin Rewards Edge, Bitwise CIO Says

The U.S. Senate's rejection of the CLARITY Act did not rattle crypto markets. It rallied them, and Bitwise Chief Investment Officer Matt Hougan argues the bounce was no accident.

In a client memo dated September 30, 2026, Hougan identified four crypto sectors that structurally benefited from the bill's failure, with stablecoin platforms, particularly Coinbase, sitting at the top of the list. The memo frames the legislative setback not as regulatory limbo but as a competitive windfall for platforms that had the most to lose from the bill's restrictions.

The market reaction was difficult to ignore. Bitcoin climbed approximately 8% in the two weeks following the Senate vote. Ethereum added about 7%. The moves in altcoins were sharper: NEAR Protocol surged close to 104% over the same period, and Uniswap gained nearly 49%. Price action of that magnitude, concentrated across assets with different risk profiles, points to something more than routine volatility.

Crypto did not flinch after the U.S. Senate killed the CLARITY Act. Bitcoin climbed roughly 8% in two weeks. Ether added about 7%. NEAR surged close to 104%, and Uniswap jumped nearly 49%.

The stablecoin angle is where Hougan's analysis gets specific. The CLARITY Act included provisions that would have restricted or eliminated customer rewards programs tied to stablecoins, the kind Coinbase currently offers through its USDC yield product. With the bill dead, those programs survive intact, at least for now. That preserves a meaningful revenue stream and a customer acquisition tool that rivals without a licensed stablecoin infrastructure cannot easily replicate. Coinbase has positioned itself aggressively around USDC through its partnership with Circle, giving it a structural advantage that the CLARITY Act would have compressed.

Hougan's memo also flags one risk capable of reversing those advantages, though the full details of that risk were not disclosed in the memo's public summary. The concern is a familiar one in crypto policy: legislative failure does not equal regulatory retreat. Regulators can pursue stablecoin restrictions through executive action, agency rulemaking, or a successor bill drafted without the industry consultation that shaped the CLARITY Act. The pattern has repeated itself before. When stablecoin restriction proposals stalled in earlier congressional sessions, the SEC and CFTC both moved to assert jurisdiction through enforcement rather than legislation. That playbook remains available.

Crypto has a documented history of rallying on regulatory setbacks, interpreting reduced legislative pressure as a green light for adoption. The dynamic is not irrational: regulatory clarity, even when favorable, takes time to price in, while the removal of a specific threat prices in immediately. Coinbase has navigated this environment with some success recently, winning a partial legal victory in Illinois over sports prediction contracts earlier this year, a sign that its legal strategy is yielding results across multiple fronts simultaneously.

The counterargument to Hougan's framing deserves space. Regulatory ambiguity is not costless. Institutional allocators, particularly those operating under fiduciary constraints, often require legal certainty before committing capital at scale. A clear framework, even one with restrictions, can unlock pools of capital that are currently sidelined. The CLARITY Act's failure leaves the U.S. crypto industry operating under the same patchwork of agency guidance and court precedent it has navigated for years. That is a manageable environment for nimble platforms but a genuine friction point for the pension funds and endowments that represent the next wave of institutional demand.

Hougan's four-sector breakdown positions the CLARITY Act's collapse as a net positive for the industry's near-term competitive dynamics. The stablecoin rewards edge for Coinbase is the clearest and most immediate of those advantages. Whether it holds depends less on Congress than on what the agencies do next.