Bitwise CIO Matt Hougan cautioned that the digital asset market may face a turbulent summer if lawmakers in Washington fail to pass key crypto legislation, despite strong early momentum under President Donald Trump’s administration.
In a note to clients, Hougan said crypto’s recent gains remain fragile without legal safeguards from Congress, warning that political gridlock could derail investor confidence just as the industry edges toward broader acceptance.
White House offers limited protection
Hougan expressed concern that the opportunity for lasting reform may slip away if Congress cannot advance bills addressing stablecoins and digital asset market structure.
He said the regulatory groundwork laid in the administration’s first 100 days, while impactful, relies heavily on executive authority and could be reversed by a future White House.
Among the early changes since January were the establishment of a US Bitcoin (BTC) Strategic Reserve, the classification of digital assets as a national priority, and the rollback of SEC lawsuits and restrictive accounting guidance.
The end of what industry leaders dubbed “Operation Choke Point 2.0,” a pattern of regulatory pressure on crypto banking access, was also seen as a turning point.
However, Hougan warned that unless Congress enacts laws to codify this progress, future administrations could undo it without legislative friction. He emphasized that even one passed bill, such as the proposed stablecoin framework, could demonstrate bipartisan alignment and reduce regulatory uncertainty.
Stablecoin legislation loses ground in Senate
That effort suffered a setback over the weekend. The Stablecoin GENIUS Act, which cleared the Senate Banking Committee in March with support from both parties, lost critical backing days before it was expected to advance.
Nine Democratic senators, including Senate Minority Leader Chuck Schumer and four others who initially supported the bill, withdrew their support, citing national security and anti-money laundering concerns.
The bill would have imposed strict requirements on US dollar-pegged stablecoins, mandating full reserve backing with liquid assets such as cash and short-term Treasuries.
Issuers with market capitalizations exceeding $50 billion would be subject to annual audits, monthly disclosures, and compliance standards addressing insolvency and marketing practices.
Hougan previously stated that the passage of a stablecoin bill would not only open crypto to traditional financial infrastructure but also boost global demand for US government debt and expand the dollar’s role in cross-border payments.
Despite the setback, Hougan remains optimistic that digital assets could reach record highs this year if Congress delivers legislative clarity. He projected that Bitcoin could rise above $200,000 under the right policy conditions.
However, he warned that failure to act would leave the market vulnerable heading into a politically charged summer.
