Crypto investors are likely underestimating the extent of the US securities regulator’s new stance on crypto, meaning that crypto prices could still have room to grow, according to the chief investment officer of Bitwise.
US Securities and Exchange Commission chair Paul Atkins published a speech he gave on July 31 at the America First Policy Institute about how blockchain will be integrated into the financial markets.
Bitwise’s Matt Hougan on Tuesday said the speech caught him “off guard” and left him wondering whether Atkins’ vision has been priced into the market.
“The most bullish document I’ve read on crypto wasn’t written by some yahoo on Twitter. It was written by the chairman of the SEC.”
“I can’t imagine reading the speech and not wanting to allocate a significant portion of your capital to crypto, or, if you work in finance, a significant portion of your career,” said Hougan.
The crypto markets have gained significantly since the election of US President Donald Trump, who had promised to change the leadership and direction of the SEC.
Bitcoin spiked to new all-time highs after former chair Gary Gensler resigned on Jan. 20 and Trump took office.
It spiked again when Paul Atkins was sworn in as the replacement chair on April 21.
Under his reign, the agency has dismissed long-running enforcement actions against crypto companies and, most recently, launched Project Crypto, an initiative to establish clear regulations.
Still, Hougan said it’s likely the market may not yet fully appreciate the implications of the changes at the SEC.
“I’m realizing I have to think bigger—and move to a faster timeline. If it wasn’t priced in for me, I’m going to guess it wasn’t priced in for others.”
SEC’s Paul Atkin’s vision for crypto
During his speech, Atkins said that the SEC, among other initiatives, is considering the best way to ensure rules and regulations don’t stifle the growth of onchain markets.
“It’s like the chairman of the SEC took all the best ideas crypto supporters have been promoting for the past decade and packaged them in a single speech, along with details on how the SEC can actually make them happen,” Hougan said.
“There’s a lot to unpack in the speech for investors; you could build an entire venture capital firm around the chairman’s vision, creating companies to capitalize on each opportunity he lays out.”
Blockchain and super apps at top of the list
Hougan said blockchains could be primed for growth based on what Atkins said in his speech about all assets, such as stocks, bonds and dollars, moving over to public blockchains.
“It doesn’t take a genius to see it: If substantially all assets are going to move onto public blockchains, you want exposure to those blockchains,” Hougan added.
At the same time, Atkins’s mention of super apps, which Coinbase and Robinhood have already embraced as a concept, could be another area set to grow.
“I’ll go out on a limb here: One of these companies could become the largest financial services company in the world, maybe even becoming the first financial services company worth more than $1 trillion. Atkins just gave them a roadmap,” Hougan said.
DeFi could thrive with clear regulations
Hougan also predicts decentralized finance (DeFi) apps could benefit from a friendlier SEC, after living in a regulatory gray zone.
Related: Crypto entrepreneurs were fleeing America, but we can bring them back
Atkins said in his speech that DeFi would play a significant role in the future, after suffering under the yoke of a hostile regulatory environment.
“With greater clarity, could these numbers rise by 10x? 50x? 100x? As traditional and crypto markets merge, the opportunity is huge,” Hougan said.
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