Bitwise: Looming U.S. Crypto Legislation Could Open Floodgates for Institutional Adoption
New legislation making its way through Congress could mark a turning point for crypto markets, clearing a path for major institutions to enter the space, according to a report from Bitwise Asset Management.
The firm highlights that regulatory uncertainty remains one of the last major barriers holding back Wall Street giants like JPMorgan, BNY Mellon, and Nasdaq. With clear rules in place, Bitwise believes billions of dollars in institutional capital could flow into crypto, accelerating the tokenization of trillions in traditional assets.
“The infrastructure is in place—it just needs approval from Washington,” Bitwise noted in its Monday report.
Lawmakers are preparing to vote on two key bills: the CLARITY Act, focused on crypto market structure, and the GENIUS Act, which outlines rules for stablecoins. The GENIUS Act has already passed the Senate with bipartisan backing, while the CLARITY Act is still being negotiated. This week, the top Democrat on the Senate Agriculture Committee called for revisions to the market structure proposal.
Bitwise CIO Matt Hougan believes the bills could be transformational: “If they pass, you can’t put the genie back in the bottle.”
Hougan also stressed that better oversight could help prevent some of the collapses that have plagued crypto over the past decade—from Mt. Gox to FTX. While not every failure could have been avoided, he argues that legislation would have prevented many.
Bitwise points to extreme volatility and lack of regulatory guardrails as key reasons institutions have remained cautious. With U.S. oversight in place, risks tied to offshore actors and unregulated platforms could fade, making crypto a more stable asset class.
Political momentum appears to be shifting as well. The GENIUS Act’s bipartisan Senate passage suggests growing consensus, and Bitwise expects institutional demand to further tip the scales.
“As firms like BlackRock and JPMorgan deepen their crypto strategies, and adoption spreads across the financial system, the asset class will become too deeply embedded to unwind,” Bitwise concluded.
