Crypto market risks losing out due to recent setback in stablecoin bill: Bitwise

Bitwise Chief Investment Officer (CIO) Matt Hougan shared in a note to investors on Tuesday that policymakers need to start addressing crypto regulations for the market to move forward. This follows nine Democrats rescinding support for the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) bill.

Bitwise CIO addresses legislative hurdles facing US stablecoin bill passage

Bitwise CIO Matt Hougan shared in a note on Tuesday that the crypto market could face a "challenging summer" due to rising political factors.

Political influence led to several wins for the industry since President Trump's election. This includes the creation of a Strategic Bitcoin Reserve, the reversal of the Staff Accounting Bulletin 121 (SAB121) and the repeal of Operation Chokepoint 2.0, among others.

However, Hougan highlighted that another political administration could overturn the progress so far, considering that it mostly emanated from the White House.

"People often ask me what could derail crypto. My answer is simple: people. More specifically, politicians," wrote Hougan.

He noted that legislators need to convert at least one crypto bill into law to ensure future political interests don't ruin the progress made to crypto.

"Congress passing at least one crypto bill would show that Democrats and Republicans can align on crypto and make it more difficult for future regimes to undo progress," said Hougan.

Hougan sees stablecoin regulation as the right starting point for securing the crypto market's future. However, recent shifts in legislative support for the GENIUS bill may weigh on crypto's regulatory progress so far.

Senate Republicans had planned to hold a potential procedural vote on Thursday, but nine Democratic lawmakers withdrew their support for the bill over the weekend. In a joint statement on Saturday, the lawmakers pointed out concerns about AML gaps, national security risks and threats to financial system stability. Notably, four of the senators who filed the statement had previously supported the bill during the Senate Banking Committee markup in March.

The sudden turn follows Democrats' criticism of President Trump's ties to crypto projects, particularly with events such as the upcoming TRUMP dinner and what others have alleged as "shady" family deals.

Still, Hougan expressed confidence that the GENIUS Act will fly, citing that the growing importance of stablecoins in the US makes it hard for lawmakers to resist.