Recent tailwinds lifting the prospects for the crypto industry in Washington are far more bullish than the market has priced in, according to Bitwise CIO Matt Hougan.
“If people understood the ramifications of the shift in D.C., the crypto market would be at 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 that “regulatory uncertainty” is the top reason why financial advisors have steered away from crypto investing over the past five years. It’s a phrase that has become an omnipresent specter over the U.S. digital assets industry.
Per Bitwise’s latest survey on the matter, a whopping 64% of advisors cited this reason as their top challenge in accessing the asset class.
Yet recent political developments in Washington are easing that tension. Last month, the House passed a bill to provide sweeping regulatory clarity for crypto assets and companies, with a two-thirds majority voting in favor. That included 71 Democrats—members of a party that have shown explicit hostility to crypto for years now.
Both the House and Senate also passed a resolution with bipartisan support to strike down SEC guidance preventing regulated banks from offering crypto custody services.
Though President Joe Biden later vetoed the bill, Hougan interprets the story as a sign that “the winds have started to change” in crypto’s favor.
Yet the magnitude of these developments is yet to play out in the market, where Bitcoin has been treading water between $60,000 and $70,000 for over two months.
According to Hougan, investors don’t yet seem interested in the news either, given that the concrete benefits of such regulatory developments are just “too far removed.”
“I’ve been on the road speaking at conferences for the past few weeks and, try though I might, I cannot get this story to resonate with people,” he wrote “I talk about the votes, and Warren’s anti-crypto army, and the surprise progress on Ethereum ETFs, and people’s eyes glaze over.”
The lack of interest, he says, looks like a juicy bit of alpha—an edge to move ahead of the market—for 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 into crypto when the biggest barrier gets lifted,” he wrote.
Edited by Ryan Ozawa.