tl;dr
Matt Hougan, CIO of Bitwise, believes crypto investors may be underestimating the positive impact of the US SEC Chair Paul Atkins' recent speech outlining blockchain integration into financial markets. Hougan called the speech the "most bullish" crypto document he's seen, emphasizing its authoritati...
Crypto investors may be underestimating the extent of the US securities regulator’s new stance on crypto, which suggests that crypto prices still have room to grow, according to Matt Hougan, chief investment officer of Bitwise. The US Securities and Exchange Commission (SEC) Chair Paul Atkins delivered a speech on July 31 at the America First Policy Institute outlining how blockchain technology will be integrated into financial markets. Hougan noted that the speech caught him off guard and questioned whether the market had fully priced in Atkins’ vision.
Hougan described the speech as the “most bullish document” on crypto he has read, emphasizing that it came from the chairman of the SEC, an authoritative figure. He expressed that anyone reading the speech should be motivated to allocate a significant portion of their capital or career focus to crypto. The crypto market has seen substantial gains since former President Donald Trump’s election, which brought leadership changes to the SEC, including the appointment of Paul Atkins as chair. Bitcoin reached new all-time highs following these shifts.
Under Atkins’ leadership, the SEC has dismissed long-standing enforcement actions against crypto firms and launched Project Crypto, an initiative aimed at clarifying regulations. However, Hougan believes the market may not yet fully appreciate the implications of these regulatory changes. He suggested a need to think bigger and act on a faster timeline, noting that if he hadn’t priced in the developments, it’s likely others haven’t either.
In his speech, Atkins spoke about ensuring regulations do not hinder the growth of onchain markets. Hougan likened the speech to a compilation of the best ideas crypto advocates have promoted over the last decade, packaged coherently with concrete steps for implementation. He noted this vision offers numerous opportunities for investors, even suggesting it could form the basis for a venture capital firm focused on the emerging crypto ecosystem.
Hougan highlighted the potential for blockchains to thrive as stock, bond, and currency assets transition onto public blockchains, suggesting that investors should seek exposure to these platforms. Additionally, Atkins’ mention of super apps, a concept already embraced by companies like Coinbase and Robinhood, points to another growth area. Hougan even speculated that one of these companies might grow to become the largest financial services institution globally, potentially valued at over $1 trillion.
Decentralized finance (DeFi), which has operated in a regulatory gray zone, stands to benefit from the SEC's clearer and friendlier regulatory approach. Hougan predicted a substantial increase in DeFi adoption, potentially rising by multiples of 10x, 50x, or even 100x, as the traditional and crypto markets converge. This regulatory clarity could usher in a new era of growth and innovation in the crypto space.