Gold’s Record Rally Signals Growing Distrust in Fiat Systems
Gold’s historic move above $5,000 per ounce is reshaping the macro backdrop for digital asset markets, according to Matt Hougan, Chief Investment Officer at Bitwise. At the same time, uncertainty surrounding U.S. crypto legislation could delay broader adoption and weigh on near-term crypto prices.
In a note to clients on Monday, Hougan said rising demand for non-sovereign stores of value and unresolved regulatory clarity are becoming two of the most important forces shaping the future of cryptocurrencies.
Gold has climbed 65% in 2025 and another 16% in early 2026, pushing prices above $5,000 per troy ounce for the first time in history. Hougan highlighted that nearly half of gold’s dollar-denominated value has been created in just the last 20 months—despite its more than 2,000-year history as money.
According to Hougan, the surge reflects the long-term effects of monetary expansion, rising debt levels, and ongoing currency debasement.
“It shows that people no longer want to keep all of their wealth in a format that relies on the good graces of others,” he wrote.
Institutional Trust Erodes as Governments Seek Control-Resistant Assets
Hougan linked the gold rally to a deeper erosion of trust in global financial institutions, accelerated by geopolitical events. After the U.S. froze Russian treasury assets following the 2022 invasion of Ukraine, central banks worldwide doubled their annual gold purchases, seeking reserves beyond foreign control.
More recently, economists in Germany have renewed calls to repatriate gold held at the New York Federal Reserve, while a Norwegian government panel warned that sovereign wealth could face higher risks of taxation, regulation, or even confiscation.
Against this backdrop, Hougan argued that crypto’s foundational principles are becoming increasingly relevant. Assets like Bitcoin allow individuals to hold wealth without reliance on centralized intermediaries, while networks such as Ethereum and Solana operate under rules no single authority can unilaterally change.
Concepts once dismissed as buzzwords—self-custody, censorship resistance, and trustless systems—may gain practical importance as confidence in traditional financial systems weakens.
Clarity Act Uncertainty Clouds U.S. Crypto Regulation
While macro trends appear favorable for crypto adoption, Hougan warned that regulatory uncertainty in the United States could slow momentum. The Clarity Act, designed to formalize the current pro-crypto regulatory environment, now faces declining odds of passage.
Earlier this year, prediction markets estimated an 80% chance of approval. That probability has dropped closer to 50% following recent setbacks, including criticism from Brian Armstrong, who described the current version of the bill as unworkable.
If the legislation fails, Hougan believes the crypto market could enter a multi-year “show me” phase, where real-world adoption—not policy expectations—drives valuation.
Adoption vs. Regulation Will Shape Crypto’s Next Phase
In a stalled-legislation scenario, widespread use of stablecoins, tokenized stocks, and blockchain-based financial products could eventually force regulators to adapt. Hougan compared this path to how companies like Uber and Airbnb pushed lawmakers to modernize outdated frameworks through mass adoption.
However, without meaningful progress, a future political shift in Washington could present serious risks to the crypto industry.
Hougan noted that the stakes for investors are significant. Passage of a crypto-friendly version of the Clarity Act could spark a strong market rally as investors price in long-term growth for stablecoins and tokenization. Failure would likely result in a slower, adoption-driven market where price appreciation depends on proven utility rather than speculation.
While Hougan remains cautiously optimistic that the bill will pass, he emphasized that crypto is approaching a defining moment—where either regulatory certainty or real-world usage will determine the market’s next chapter.
