The lack of regulatory clarity has been holding back financial advisors from increasing exposure to crypto over the last five years, said Bitwise chief investment officer Matt Hougan.
By Bhushan Akolkar
Edited by Julia Sakovich
Updated
2 mins read
Crypto asset manager Bitwise believes that a shift in the US political landscape later this year could increase the chances of crypto exposure to the $20 trillion financial advisory industry. Of course, this will be subject greater regulatory clarity with lawmakers clearing up the legal uncertainties.
The lack of regulatory clarity has been holding back financial advisors from increasing exposure to crypto over the last five years, said Bitwise chief investment officer Matt Hougan in a June 4 post. However, Hogan believes that the United States is finally moving towards regulatory clarity.
“Imagine, then, how much of that $20 trillion will go into crypto when the biggest barrier gets lifted. If you think BlackRock’s move into the crypto space positively impacted the market, imagine if all of Wall Street accepted crypto as a normal part of the market,” he added.
Hougan noted a notable “shift” occurring last month as Democrats collaborated with Republicans to repeal Staff Accounting Bulletin 121. Additionally, the passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) by the House, celebrated as a victory by much of the crypto industry, further underscored this changing landscape.
On the other hand, the US SEC also approved the spot Ethereum ETF recently on May 23 which will go live for trading very soon in the coming weeks. Hogan added that the recent veto to repeal the SAB 121 by President Joe Biden shows that crypto still has a long way to go. “But even this is a minor setback. We’ve been sailing upwind for a decade in crypto,” he added.
Hougan suggests that there remains considerable “alpha” potential within the crypto market, particularly for those who have yet to venture beyond the confines of traditional finance. Despite his efforts to discuss crypto-related political advancements at conferences, he often encounters disinterest, observing “people’s eyes glaze over”.
“If people understood the ramifications of the shift in [Washington D.C.], the crypto market would be at new all-time highs,” Hougan argued. Besides, he added that there have been currently many flip-flops taking place when it comes to crypto policy decision-making.
“The tide has changed, but the water hasn’t come in yet. Wake me up when the action happens,” he added.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
