Markets
Crypto Market Is Currently ‘Undervaluing’ US Policy Changes: Bitwise Exec
Recent tailwinds boosting the outlook for the crypto industry in Washington are much more bullish than the market anticipated, according to Bitwise CIO Matt Hougan.
“If people understood the ramifications of the change in DC, the crypto market would reach new highs,” Hougan wrote in a blog post on Tuesday.
The executive – whose company runs one of the world’s largest Bitcoin ETFs – said “regulatory uncertainty” is the main reason financial advisors have moved away from crypto investing over the past five years. It’s a phrase that has become a ubiquitous specter in the US digital asset industry.
According to Bitwise’s latest survey on the subject, a whopping 64% of advisors cited this reason as their main challenge in accessing the asset class.
However, recent political developments in Washington are easing that tension. Last month, the Chamber approved a bill to provide broad regulatory clarity for crypto assets and companies, with a two-thirds majority voting in favor. This included 71 Democrats – members of a party that has demonstrated explicit hostility for cryptography for years.
Both the House and Senate also passed a resolution with bipartisan support to overturn SEC guidance that prevents regulated banks from offering cryptocurrency custody services.
Although President Joe Biden later vetoed the projectHougan interprets the story as a sign that “the winds have started to shift” in favor of crypto.
However, the magnitude of these developments has yet to manifest itself in the market, where Bitcoin has been hovering between $60,000 and $70,000 for more than two months.
According to Hougan, investors also don’t seem interested in the news, given that the concrete benefits of such regulatory developments are “a long way off.”
“I’ve been on the road speaking at conferences the last few weeks, and try as I might, I can’t seem to get this story to resonate with people,” he wrote. “I talk about Warren’s votes and anti-crypto army, and the surprising progress in Ethereum ETFand people’s eyes glaze over.”
The lack of interest, he says, looks like juicy alpha — a market-getting edge — to those in the know about crypto, with $20 trillion in wealth controlled by U.S. financial advisors at stake.
“Imagine, then, how much of that $20 trillion will go to crypto when the biggest barrier is removed,” he wrote.
Edited by Ryan Ozawa.