Crypto Markets Are Currently ‘Underestimating’ US Policy Changes: Bitwise Exec

According to Bitwise CIO Matt Hougan, the recent tailwinds boosting the outlook for the cryptocurrency industry in Washington are more optimistic than the market expected.

“If people understood the consequences of the DC change, the cryptocurrency market would hit all-time highs,” Hougan wrote in a blog post Tuesday.

An executive at a company that operates one of the world’s largest Bitcoin ETFs said “regulatory uncertainty” was the biggest reason financial advisors have stopped investing in cryptocurrencies over the past five years. This is a phrase that has become a phantom throughout the U.S. digital asset industry.

A whopping 64% of advisors cited this as their biggest challenge in accessing the asset class, according to Bitwise’s latest survey on the matter.

But recent political developments in Washington are easing those tensions. Last month, the House of Representatives passed a bill that would provide sweeping regulatory clarity for cryptocurrency assets and companies, with two-thirds voting in favor. This included 71 Democrats. These are members of a political party that has shown outright hostility to cryptocurrencies for years.

Both the House and Senate have passed resolutions with bipartisan support to repeal SEC guidance prohibiting regulated banks from offering cryptocurrency custody services.

President Joe Biden later vetoed the bill, but Hogan interpreted the story as a sign that “the winds are starting to change” in favor of cryptocurrencies.

However, the scale of this development is yet to be seen in the market where Bitcoin has been hovering between $60,000 and $70,000 for over two months.

According to Hougan, investors don’t seem to be interested in the news yet, given that the concrete benefits of such regulatory developments are “too far off.”

“I’ve been speaking at several conferences over the past few weeks, and no matter how hard I tried, I couldn’t get this story to resonate with people,” he wrote. “I talk about voting and Warren’s anti-crypto army.” And people’s eyes are shining with the amazing progress of the Ethereum ETF.”

He said the lack of interest looks like an advantageous alpha that could give it an edge ahead of the market to those who know about the cryptocurrency, which puts at stake $20 trillion of wealth controlled by U.S. financial advisors.

“So imagine how much of that $20 trillion will go into cryptocurrencies when the biggest barriers are lifted,” he wrote.

editor Ryan Ozawa.