If the US Delays Stablecoin Legislation, Altcoins Could Take a Major Hit!

A critical warning from Bitwise’s Chief Investment Officer: If the U.S. Congress fails to pass stablecoin legislation in time, a turbulent period may be ahead for altcoin investors.

GENIUS Act in Limbo: Altcoins Holding Their Breath 😟

Bitwise CIO Matt Hougan has warned that any delay in stablecoin and crypto-related legislation in Washington could bring serious challenges to the altcoin market.

📅 The GENIUS Act, expected to be voted on in the Senate before May 26, initially received bipartisan support from both Democrats and Republicans. However, recent developments show that some Democratic senators have now withdrawn their backing.

Why Is the Stablecoin Bill So Important?

According to Hougan, the altcoin ecosystem is heavily dependent on the presence of stablecoins due to their critical roles in:

• Providing liquidity,
• Acting as a bridge from traditional finance,
• Serving as a safe haven during times of market volatility.

🚫 Without clear regulatory frameworks, major financial institutions may deem the sector too risky and stay away. This could significantly limit capital inflow, especially into low-cap tokens.

Institutional Investors May Pull Back

Failure to pass the legislation could delay institutional entry into the altcoin market. Institutional players typically avoid uncertain environments and demand legal clarity before investing.

If the legislation isn't finalized by May 26, the altcoin market may weaken in both liquidity and investor confidence.

Some Good News: Green Light from the White House

Even if Congress stalls, the U.S. administration has made several crypto-friendly moves in the past 100 days:

• The U.S. Treasury has reportedly built a strategic reserve of ~200,000 BTC.
• The White House has defined digital assets as a “national priority.”
• The SEC has rolled back some restrictive accounting rules, allowing banks easier access to crypto

According to Bitwise’s CIO, these are positive signals—but without solid legal backing, future administrations could reverse these actions easily.

⚖️ Final Word: The Greatest Risk for Altcoins Is Uncertainty

Regulatory measures like the GENIUS Act hold the potential to unlock growth in the altcoin market, boost investor trust, and attract major capital. But if Congress moves too slowly, the crypto space could face renewed turbulence.

📌 For crypto investors, May 26 is a critical date. If the stablecoin legislation fails to pass, many altcoins may face a powerful storm ahead.