Crypto Market Undervalues U.S. Policy Shifts: Insights from Bitwise Exec


Recent political developments in Washington have created significant tailwinds for the crypto industry, yet the market hasn't fully appreciated their bullish implications, according to Matt Hougan, Chief Investment Officer at Bitwise Asset Management. Hougan believes that if the market fully understood these policy shifts, cryptocurrencies would reach new all-time highs.

Regulatory Uncertainty: A Major Deterrent

Hougan highlights that "regulatory uncertainty" has been the primary reason financial advisors have avoided crypto investments over the past five years. According to Bitwise’s latest survey, 64% of advisors cited this uncertainty as their top challenge in accessing the asset class. This has cast a long shadow over the U.S. digital assets industry, hindering wider adoption and investment.

Positive Political Developments

However, recent legislative actions in Washington signal a shift towards regulatory clarity:

  1. House Bill for Regulatory Clarity: Last month, the House passed a bill aimed at providing comprehensive regulatory clarity for crypto assets and companies. The bill received a two-thirds majority, including votes from 71 Democrats, a party that has traditionally been more skeptical of cryptocurrencies.

  2. Resolution on Crypto Custody Services: Both the House and Senate passed a bipartisan resolution to overturn SEC guidance that prevented regulated banks from offering crypto custody services. Although President Joe Biden vetoed the bill, Hougan sees this as a sign of changing winds in favor of the crypto industry.

Market's Tepid Response

Despite these positive developments, the market's reaction has been muted. Bitcoin has remained between $60,000 and $70,000 for over two months. Hougan attributes this to investors’ lack of interest in political news, as the concrete benefits of regulatory changes seem too distant.

“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,” Hougan wrote in a blog post. He mentioned that discussing votes, regulatory changes, and progress on Ethereum ETFs often results in glazed eyes among his audience.

A Hidden Opportunity

Hougan believes this disinterest presents a significant opportunity. The untapped potential for crypto investments is enormous, given that U.S. financial advisors control $20 trillion in wealth. As the biggest barrier—regulatory uncertainty—is lifted, substantial amounts of this wealth could flow into the crypto market.

“Imagine, then, how much of that $20 trillion will go into crypto when the biggest barrier gets lifted,” Hougan speculated, suggesting that those who understand these developments now could gain a significant edge.


Matt Hougan’s insights underscore a critical disconnect between recent regulatory advancements in Washington and the crypto market’s valuation. As regulatory clarity improves, the potential for significant investment inflows into crypto assets increases. For those in the know, this represents a prime opportunity to capitalize on the evolving landscape.

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