Gold’s rise beyond $5,000 an ounce and growing uncertainty around U.S. crypto legislation are shaping a critical moment for digital asset markets, according to Matt Hougan, Bitwise’s chief investment officer.
Key points to remember:
- Gold’s rise above $5,000 reflects growing distrust of fiat currencies and centralized financial systems.
- Institutional demand for assets beyond government control is reshaping how investors view gold and crypto.
- As trust in traditional institutions erodes, the self-custody and censorship-resistant features of cryptocurrencies become more relevant.
In a note to clients on Monday, Hougan said the combination of growing demand for assets outside government control and a loss of confidence in near-term regulatory clarity could influence both crypto adoption and price action in the months to come.
Gold has climbed sharply, gaining 65% in 2025 and another 16% so far in 2026, marking the first time it has traded above $5,000 per troy ounce.
Gold Rise Reflects Growing Concerns Over Fiat Currencies
Hougan pointed out that about half of gold’s value, denominated in dollars, has been created in just the last 20 months, despite its thousands-year history as a store of value.
He argued that the move reflects the long-term effects of expansionary monetary policy, rising debt levels and currency depreciation, but also a deeper change in investor behavior.
“This shows that people no longer want to keep all their wealth in a format that relies on the good graces of others,” Hougan wrote.
Hougan linked the rally to a broader erosion of trust in institutions, accelerated by geopolitical events.
After the United States froze Russian Treasury assets in 2022 following the invasion of Ukraine, central banks doubled their annual gold purchases, he said, seeking reserves less exposed to external control.
More recently, German economists have advocated the repatriation of gold held at the New York Federal Reserve, while a Norwegian government committee has warned that sovereign wealth could be subject to higher taxation, regulatory intervention or confiscation.
In this context, Hougan said that the fundamental characteristics of cryptography are becoming more and more relevant. Assets like Bitcoin enable ownership without the need for centralized intermediaries, while networks like Ethereum and Solana operate under rules that no single authority can change.
Characteristics often considered jargon, including self-custody and censorship resistance, may become more important as trust in traditional systems weakens.
Chances of passage of the US Crypto Clarity Act slip to around 50%
At the same time, Hougan flagged growing uncertainty around the Clarity Act, legislation aimed at cementing a pro-crypto regulatory framework in the United States.
Earlier this year, prediction markets put the odds of success at nearly 80%, but those estimates have moved closer to 50% following recent setbacks, including criticism from Coinbase CEO Brian Armstrong.
If the bill fails, Hougan warned that crypto could enter a years-long “demonstration” period, where pricing and adoption depend on tangible, real-world usage rather than expectations.
On the other hand, its adoption could trigger a strong recovery as investors assess clearer growth trajectories for stablecoins and tokenized assets.
Hougan said he remained optimistic that the legislation would pass, but warned that without it, the market would have to prepare for a phase of slower, evidence-based growth.
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