Bitwise CIO Matt Hougan believes the market is underestimating the significance of Washington’s evolving attitude toward cryptocurrenciesHougan said in a June 4 memo that the US political landscape regarding crypto has changed significantly toward a more positive stance in recent weeks, and the market would been at a new all-time high already if its impact had been priced in.He added that the shifting tides in Washington could unlock substantial “alpha,” a term used to describe an investment strategy’s ability to outperform the market.Historically, crypto has been a partisan issue, with Republicans generally supporting it and Democrats showing resistance. Hougan cited Senator Elizabeth Warren (D-MA) famously announcing plans to “build an anti-crypto army” last March as an example of the Democratic opposition.However, crypto advocates have been strategically building political influence, culminating in significant legislative actions.On May 8, 21 House Democrats voted alongside Republicans to repeal SAB 121, a controversial SEC rule that restricts large banks from holding crypto. The Senate followed suit, with 10 Democrats, including Senate Majority Leader Chuck Schumer, joining the GOP in support of the repeal.This marked the first positive legislative action on crypto in US history.Further momentum came on May 20, when 71 Democrats joined 208 Republicans in the House to pass FIT21, a comprehensive crypto bill that would assign primary oversight to the crypto-friendly Commodity Futures Trading Commission (CFTC).Additionally, the SEC, led by Democrat-appointed chair Gary Gensler, approved filings to list spot Ethereum ETFs, a move few anticipated.Despite these advancements, crypto faces ongoing political challenges. President Joe Biden recently vetoed the repeal of SAB 121, highlighting the complex regulatory environment. However, Hougan sees these developments as a turning point.He said:“Crypto still has a long way to go, politically speaking. But the winds have started to change.”Hougan believes the broader market has yet to recognize the implications of these political shifts. He said that regulatory uncertainty has long been a primary concern for financial advisors and Wall Street institutions.A recent Bitwise survey revealed that 64% of US financial advisors cite regulatory uncertainty as the main barrier to greater crypto exposure in their portfolios. Hougan argues that once this barrier is lifted, a significant portion of the estimated $20 trillion managed by these advisors could flow into crypto.The potential impact on Wall Street is equally substantial. Major financial institutions have hesitated to fully embrace crypto due to regulatory concerns. Hougan suggests that if Wall Street were to accept crypto as a mainstream asset, the market could reach new heights.While the broader market remains largely indifferent to these changes, Hougan believes this presents an opportunity for savvy investors. He said:“The market will wake up to the fact that we are in a new era for crypto. Until it does, there may just be some alpha laying around.”AJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.CryptoSlate is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI. Get the latest crypto news and expert insights. Delivered to you daily.The S-1 filing follows the SEC’s approval of NYSE Arca’s proposed rule change on behalf of ProShares.Rob Marrocco believes crypto ETFs beyond Bitcoin and Ethereum are unlikely without first establishing a futures market or changing regulation.Ripple said Standard Custody CEO Jack McDonald would help the firm achieve its USD-backed stablecoin plans.The examinations will determine S&C’s awareness of FTX misconduct and potential conflicts during SBF’s Robinhood shares acquisition.CryptoSlate’s latest market report dives deep into the effects corporate Bitcoin purchases have on the market.Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
