⏳ Crypto’s Three-Year Ultimatum: Why the Next 36 Months Will Decide the Industry’s Fate

The crypto market is standing at a historic crossroads — and the clock is ticking.

According to Bitwise Chief Investment Officer Matt Hougan, digital assets now have a three-year window to prove they truly matter to the real world. If they fail, the industry could face harsh regulatory backlash that reshapes its future for decades.

This warning comes as optimism around U.S. crypto legislation suddenly fades, exposing just how fragile the sector’s political footing still is.

Just weeks ago, the CLARITY Act — a long-awaited regulatory framework for crypto — looked almost certain to pass. Odds were estimated near 80%.

Today, those odds have dropped closer to 50%.

The turning point came when Coinbase CEO Brian Armstrong publicly criticized key provisions in the bill, calling them “catastrophic.” Coinbase’s withdrawal of support sent shockwaves through Washington, prompting the Senate Banking Committee to indefinitely postpone its markup.

Instead, lawmakers pivoted toward housing legislation following President Trump’s renewed push on affordability — leaving crypto policy in limbo.

Meanwhile, the Senate Agriculture Committee pressed forward with a separate crypto bill, but even that path remains unstable. A looming government shutdown, lack of Democratic support, and last-minute amendments nearly derailed progress.

Only direct White House intervention stopped a controversial swipe-fee amendment from Senator Roger Marshall — an amendment that would have ignited a war between Wall Street and major retailers and likely sunk the bill entirely.

The message is clear: crypto’s legislative momentum is fragile, political, and far from guaranteed.

Hougan doesn’t believe crypto can rely on Washington forever.

If regulation fails now, the industry will enter what he calls a “show me” period — a forced trial by adoption.

History supports his argument.

Technologies like Uber and Airbnb didn’t win regulatory approval first — they won users. By the time lawmakers reacted, the services had become too essential to ban.

Crypto must now follow the same path.

By 2029, digital assets must become indispensable to:

Fail to do so, and future administrations could impose restrictive or punitive legislation.

Hougan draws a striking parallel between crypto’s struggle and gold’s explosive rise.

Gold has surged past $5,000 per ounce, gaining:

Astonishingly, half of gold’s total dollar value was created in just 20 months — after thousands of years as a store of value.

Why?

Because trust in centralized institutions is eroding.

After the U.S. froze Russia’s treasury assets in 2022, central banks doubled annual gold purchases. German economists now urge repatriating gold from the New York Fed, while Norwegian officials warn sovereign wealth funds face rising risks of taxation, regulation, or even confiscation.

This shift reveals a deeper truth:
People increasingly want assets that don’t depend on political goodwill.

That’s where crypto fits in.

Bitcoin enables ownership without permission.
Ethereum and Solana run on rules no single authority can rewrite.

In an era of geopolitical tension and financial weaponization, these features are no longer theoretical — they’re strategic.

If CLARITY passes, Hougan expects:

If it fails, markets enter a prolonged “wait-and-see” phase, where optimism battles uncertainty.

And uncertainty can last years.

Investment bank TD Cowen warns crypto legislation could slip until 2027, with full implementation delayed to 2029 as lawmakers maneuver around midterm elections.

Yet, despite political chaos, the on-chain data tells a different story.

Bitwise’s Q4 2025 report highlights:

Even more telling, a Coinbase–Glassnode survey found 70% of institutions believe Bitcoin is undervalued, despite a brutal Q4 correction that erased nearly one-third of its value from highs above $125,000.

Crypto doesn’t need permission — but it does need relevance.

The next three years will determine whether digital assets become:

The choice won’t be made in Congress alone.

It will be made by users, institutions, and real-world adoption — one transaction at a time.

⏱️ The countdown to 2029 has already begun.