The U.S. is on the verge of passing landmark crypto legislation, and if it succeeds, the impact could be profound, not only by unlocking growth, but by significantly reducing risk, asset manager Bitwise said in a report on Monday.
The growth story is straightforward according to Bitwise. Regulatory clarity would empower major financial institutions, such as JPMorgan (JPM), BNY Mellon (BK), Nasdaq (NDAQ), to fully build in crypto, the report said.
That means billions in new investment and a path to migrate trillions of traditional assets onto blockchain rails. The infrastructure is ready; it just needs Washington’s go-ahead, according to the asset manager.
This week the House of Representatives is voting on the CLARITY Act, a crypto market structure bill, and the GENIUS Act, which regulates stablecoins in the U.S.
Yesterday, the top democrat of the Senate Agriculture committee said the market structure bill needs serious changes.
If these bills pass through Congress, "you can’t put the genie back in the bottle," wrote Matt Hougan, chief investment officer at Bitwise.
The deeper, under appreciated shift will be in risk, wrote Hougan. Crypto’s reputation has been battered by collapses including FTX, Terra/Luna, 3AC, Celsius, Mt. Gox. These weren’t just failures of business models; they were failures of oversight. Without clear U.S. regulation, bad actors thrived in offshore shadows, and investors paid the price.
Stronger laws wouldn’t have prevented every scandal, but they would’ve stopped many, the report said.
Bitwise notes that crypto’s volatility, and previous 70%+ drawdowns, have kept institutions on the sidelines. If legislation eliminates the wildcard risk of offshore implosions, those extreme crashes may become far less frequent.
And no, the political winds aren’t likely to reverse, Bitwise said. The GENIUS Act passed the Senate 68–30, with bipartisan support including 18 Democrats.
Wall Street wants in, and as major institutions deepen their crypto footprints, political support will only grow. When BlackRock, JPMorgan, and millions of Americans are invested, crypto becomes part of the system, too embedded to ignore, and too integral to unwind, the report added.
Read more: Bitwise Adds Proof of Reserves for Bitcoin, Ether ETFs
