Crypto traders braced for a total wipeout this week but Bitcoin had other plans

For Matt Hougan, CIO at Bitwise Asset Management, the U.S. still has two and a half more years of a pro-crypto regulatory regime, during which the industry can continue to move forward.

Hougan remains bullish on crypto. “I don't think it will stop investors from considering smaller-cap assets with strong tokenomics and links to real-world assets.”

However, he added, “had the Clarity Act passed the Senate vote, I think crypto would have been the consensus ‘smart money trade’ in Q4, and prices would have ramped back toward all-time highs.”

But because it failed, “I think the road ahead is bumpier,” Hougan said. “I don’t think it’s changed too much from where it was Monday before the vote.”

Hougan said the Clarity Act was and remains irrelevant to bitcoin, so if bitcoin’s price continues to drop, it has more to do with sentiment than fundamentals. “If bitcoin sells off in the short-term due to Clarity Act vibes, I’d consider that an opportunity,” he said.

No bottom yet?

Vineet Budki, managing partner and CEO of Sigma Capital, said bitcoin’s recovery and the long-liquidation flush do not yet establish that the bottom is in.

“I’m not ready to make that call,” Budki said. “I’d rather give it a quarter and let the price action speak before taking a firm directional view.”