The cryptocurrency industry could see a significant influx of capital from the financial advisory sector once regulatory uncertainties in the United States are resolved, according to Bitwise’s Head of Investments in the crypto space.
In a post on June 4, Bitwise’s Chief Investment Officer, Matt Hougan, highlighted how regulatory ambiguity has been a major deterrent for financial advisors looking to increase their exposure to cryptocurrencies over the past five years. However, Hougan believes that the U.S. is moving closer to regulatory clarity, potentially opening up the industry to the country’s $20 trillion financial advisory market.
Hougan expressed optimism about the impact that widespread acceptance of crypto by Wall Street could have on the market, drawing parallels to the positive effect of BlackRock’s entry into the space.
Recent developments, such as the repeal of Staff Accounting Bulletin 121 by Democrats and the passing of the Financial Innovation and Technology for the 21st Century Act by the House, have signaled a positive shift towards regulatory clarity. Additionally, the approval of spot Ether exchange-traded funds by the Securities and Exchange Commission on May 23 has been seen as a significant milestone.
Despite President Joe Biden’s veto of the SAB 121 repeal, Hougan remains confident in the long-term prospects of the crypto industry, emphasizing the untapped potential for growth and opportunities for alpha generation.
Hougan believes that the general market is not yet fully prepared for the upcoming changes in the regulatory landscape and the potential impact on crypto markets. He stresses the importance of understanding the implications of regulatory shifts in Washington D.C., suggesting that these could propel the crypto market to new all-time highs.
While challenges remain, including the uncertain fate of FIT21 in the Senate and the pending launch of spot Ether ETFs, Hougan remains positive about the future of the industry. He acknowledges that significant policy changes are yet to occur in Washington but remains optimistic about the long-term growth prospects of the crypto market.
In conclusion, Hougan emphasizes the need for broader awareness and understanding of crypto-related developments to unlock the full potential of the market and drive it to new heights.