Bitwise CIO Sounds Alarm: Crypto Bill Collapse May Spark Summer Market Bloodbath

Regulatory limbo hits crypto again—Washington’s latest failure to pass clear rules leaves markets dangling by a thread. The industry’s favorite scapegoat (politicians, naturally) just got a fresh coat of villainy.

Active traders, brace for impact: Without legislative guardrails, expect volatility to go full rodeo. Meanwhile, Wall Street suits will keep pretending they ’never really believed in crypto anyway’—right after liquidating their positions.

One truth remains: When DC fumbles, retail investors pay the price. The only ’stablecoin’ in Congress? Their ability to destabilize markets through inaction.

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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