Markets
Crypto Market Is Currently “Underestimating” Political Changes in the US: Bitwise Exec
According to Bitwise CIO Matt Hougan, the recent tailwinds that have strengthened the outlook for the cryptocurrency industry in Washington are much more bullish than the market had anticipated.
“If people understood the consequences of the change in DC, the cryptocurrency market would reach new all-time 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 cryptocurrency investments over the past five years. It’s a phrase that has become a ubiquitous specter in the digital asset industry in the United States.
According to Bitwise’s latest survey on the topic, as many as 64% of advisors cited this reason as the main challenge in accessing the asset class.
Yet recent political developments in Washington are easing that tension. Last month, the House passed a bill provide broad regulatory clarity to crypto businesses and companies, with a two-thirds majority voting in favor. This included 71 Democrats, members of a party who demonstrated explicit hostility to cryptocurrencies for years now.
Both the House and Senate also passed a resolution with bipartisan support to eliminate SEC guidelines that prevent regulated banks from offering cryptocurrency custody services.
Although President Joe Biden later vetoed the billHougan interprets the story as a sign that “the winds have started to shift” in favor of cryptocurrencies.
However, the extent of these developments has yet to manifest itself in the market, where Bitcoin has been afloat between $60,000 and $70,000 for over two months.
According to Hougan, investors also don’t seem interested in the news yet, as the concrete benefits of such regulatory developments are simply “too distant.”
“I’ve been on the road speaking at conferences for the past few weeks and, try as I might, I can’t get this story to resonate with people,” he wrote “I’m talking about votes and Warren’s anti-crypto army, and the surprise proceeds Ethereum ETFand people’s eyes glaze over.”
The lack of interest, he says, seems like a juicy piece of alpha – a lead in getting ahead of the market – for those who know cryptocurrencies, with $20 trillion in wealth controlled by US financial advisors at stake.
“Imagine, then, how much of that $20 trillion will go into cryptocurrencies when the biggest barrier is removed,” he wrote.
By Ryan Ozawa.