Crypto markets advanced following the U.S. Senate's decision to kill the CLARITY Act, with Bitcoin climbing roughly 8% over two weeks and Ether adding about 7%. Other tokens saw larger gains, with NEAR surging close to 104% and Uniswap jumping nearly 49%.
In a Sept. 30 client memo titled “Why Crypto Rallied When Clarity Failed,” Bitwise Chief Investment Officer Matt Hougan stated that the market's positive movement was deliberate. He argued that the bill's collapse gave the industry favorable rules on a faster timeline.
The Senate voted 49–50 on cloture on Sept. 15, falling 11 votes short of advancing the legislation. While the White House and Senator Lummis blamed Democrats for derailing the vote and called it a setback for U.S. crypto leadership, Hougan identified four specific groups that benefited from the failure.
A primary dispute during the CLARITY Act negotiations centered on stablecoin yield. Banks had pushed for language that would ban any crypto platform from paying interest or rewards on stablecoin balances. Because that language died with the bill, and the 2025 GENIUS Act only bars issuers from paying interest directly while remaining silent on intermediaries, exchanges are permitted to pay rewards on stablecoin holdings without a federal ceiling.
Coinbase has already expanded USDC stablecoin rewards through Morpho’s onchain lending, positioning itself as a near-term beneficiary. Furthermore, established exchanges retain their competitive moats because the bill's proposed national spot-exchange license, which would have lowered barriers for new entrants, is off the table.
In addition, the SEC and CFTC are writing crypto rules without Congress. Two days after the Senate vote, the SEC issued a five-year innovation exemption allowing tokenized U.S. listed stocks to trade through permissioned automated market makers and liquidity pools. Coinbase tokenized stocks are already live on Aave v4 on Base following the exemption.
Tokens that use protocol revenue for buybacks also benefited. While the bill could have classified buybacks under security territory, SEC guidance clarified without the statute that announcing a buyback does not make a functional-network token a security. This regulatory clarity contributed to post-vote rallies for NEAR, Uniswap, Hyperliquid, and Pump.
Hougan warned that these developments rely on agency guidance rather than formal statute, meaning a future administration could reverse them. However, he noted that two years is sufficient time for major firms to build onchain, potentially making the sector too large to roll back by that time. The CLARITY Act is not expected to see a revival until after the midterm elections.
