Sometimes, nothing happening in Washington is actually the best outcome for crypto. That’s the bold argument Matt Hougan, chief investment officer at Bitwise Asset Management, made in his weekly memo on September 30. With the CLARITY Act failing to pass the U.S. Senate, Hougan identified four corners of the crypto market that came out ahead precisely because the bill stalled.
It sounds counterintuitive. Why would a failed regulatory bill be good news? The answer lies in what the bill would have done, and what its failure leaves untouched. Let’s break down Hougan’s four winners and why their momentum could carry through the rest of 2025.
What Was the CLARITY Act?
The CLARITY Act was a proposed piece of U.S. legislation designed to draw clear lines around digital asset regulation. In simple terms, it aimed to answer the question: Who regulates crypto? The Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC)?
For years, crypto companies have lived in a gray zone. Some tokens were treated like stocks. Others like commodities. The CLARITY Act wanted to put an end to that ambiguity. In theory, clarity helps markets grow. In practice, Hougan argues the bill would have drawn lines that constrained certain sectors more than helped them.
The 4 Crypto Winners Identified by Bitwise
According to Hougan’s memo, four areas of crypto are thriving in the absence of new rules. Here’s why each one benefits.
1. Stablecoins Continue Their Explosive Growth
Think of stablecoins as the dollar bills of the crypto world. They’re digital tokens pegged to real-world currencies, mostly the U.S. dollar, designed to hold a steady value. Tether (USDT) and USD Coin (USDC) are the biggest names.
Stablecoins were on track to handle over $1 trillion in transactions in 2025, a figure that stunned traditional finance analysts. With no new federal framework restricting how they’re issued or used, stablecoins keep growing organically. Payment giants, remittance companies, and even banks are exploring them. The CLARITY Act would have added compliance hurdles. Its failure means stablecoin issuers can keep innovating without waiting for Washington.
2. Crypto Exchanges Gain Breathing Room
Centralized exchanges like Coinbase and Kraken operate in a regulatory limbo. The CLARITY Act would have imposed stricter definitions around what counts as a securities exchange versus a commodities exchange. Without those rules, exchanges can keep listing a wide variety of tokens and offering diverse products.
This doesn’t mean regulation disappears. Existing rules still apply. But the absence of a sweeping new framework gives platforms more flexibility to serve users and expand internationally. If you’re trading crypto, platforms like Kraken benefit from this open playing field.
3. Tokenization Platforms Hit Their Stride
Tokenization sounds technical, but the concept is simple. It means putting real-world assets, like stocks, bonds, real estate, or even art, onto the blockchain. Imagine owning a fraction of a Manhattan skyscraper through a digital token stored in your phone.
According to Bitwise, the tokenization of real-world assets could grow into a $16 trillion market by 2030. The CLARITY Act would have introduced specific rules around how these tokens are classified, potentially slowing down experimentation. Without it, tokenization platforms are moving fast. Major financial institutions are already testing tokenized funds and on-chain treasury products. The current environment favors builders over bureaucrats.
4. Buyback-Driven Tokens Build Wealth
This is the most interesting winner on Hougan’s list. Buyback-driven tokens are cryptocurrencies where the protocol or company regularly uses revenue to buy back its own tokens, reducing supply and theoretically increasing value.
Think of it like a stock buyback in traditional finance. Companies like Apple repurchase shares to return value to shareholders. In crypto, projects like Hyperliquid, Pump.fun, and several others have implemented buyback mechanisms funded by trading fees or platform revenue.
Without new securities laws, these token models can continue to flourish. Hougan sees this as one of the most underrated trends in crypto right now. It mirrors the value-accretion strategies of mature public companies, applied to digital assets.
Why Failure Can Sometimes Be a Win
The crypto industry has spent years begging regulators for clear rules. So why is Hougan celebrating a legislative failure?
The answer is timing. The CLARITY Act was well-intentioned but potentially premature. Crypto is evolving faster than any legislative body can keep up. By writing rigid definitions into law today, Congress might have locked in categories that become obsolete tomorrow. Consider how the internet would have developed if 1995 laws had permanently defined what a website could do.
For now, the market is defining itself. Projects ship products. Users vote with their wallets. Capital flows to what works. That bottom-up evolution, Hougan argues, is healthier than top-down regulation at this stage.
What This Means for Crypto Investors
If you’re building a crypto portfolio in late 2025, Hougan’s framework offers a useful lens. Look for sectors that benefit from regulatory ambiguity rather than fight against it. Stablecoins, exchanges, tokenization, and revenue-sharing tokens all share that quality right now.
Of course, this isn’t financial advice. Every investment carries risk, and regulation can change overnight. But understanding why certain sectors are winning helps you make smarter decisions.
One practical step: if you’re holding significant crypto assets, consider securing them in a hardware wallet. Exchange hacks and platform failures remain real risks, and self-custody gives you full control over your holdings.
Conclusion: Patience Pays in Crypto
The CLARITY Act’s collapse is a reminder that in crypto, sometimes the best regulation is no regulation at all, at least until the industry matures enough to write rules that won’t box it in. Stablecoins, exchanges, tokenization platforms, and buyback-driven tokens are all thriving in this environment. Watch these four corners closely. They’re not just surviving regulatory uncertainty. They’re turning it into a competitive advantage.
