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YEREVAN (CoinChapter.com) — The crypto market could become a $20 trillion industry, says Matt Hougan, Chief Investment Officer at Bitwise. Regulatory clarity in the U.S. might finally open the floodgates for financial advisors to invest in crypto.
Unclear Rules Stop Advisors from Investing in Crypto
For the past five years, financial advisors have hesitated to invest in crypto. The primary reason is regulatory uncertainty. Without clear guidelines, advisors are cautious about venturing into this space. Hougan emphasizes that this has been the main barrier preventing significant investment.
Recent political moves indicate a shift towards clearer regulations. Last month, Democrats repealed Staff Accounting Bulletin 121. Additionally, the House passed the Financial Innovation and Technology for the 21st Century Act (FIT21). These actions signal potential changes that could benefit the crypto industry.
Stable Regulations Could Draw Trillions to Crypto
Hougan suggests that clearer regulations could lead to a significant influx of investment. He points out that the $20 trillion financial advisory industry could begin investing in crypto once the regulatory environment stabilizes. This potential shift could drastically increase crypto market capitalization.
Source: Matt Hougan
BlackRock’s recent entry into the crypto space had a noticeable impact on the market. Hougan believes that if Wall Street fully embraced crypto, the effects would be even more substantial.
“Imagine if all of Wall Street accepted crypto as a normal part of the market,”
he remarks.
On May 23, the Securities and Exchange Commission approved spot Ether exchange-traded funds (ETFs) after months of speculation. However, challenges remain, as evidenced by President Joe Biden’s veto of the SAB 121 repeal. Hougan notes that despite these setbacks, progress is being made.
Biden Vetoes Crypto-Friendly Legislation Despite Bipartisan Support. Source: BlockchainAssn Crypto’s Untapped Potential Still Waiting
The crypto market still holds a lot of untapped potential. Hougan observes that many financial advisors remain outside the “crypto bubble.” He often sees disinterest when discussing crypto-related political developments at conferences. Yet, he believes that if the implications were understood, the market would reach new highs.
Despite recent progress, significant policy changes have not yet occurred. With the SAB 121 repealed and FIT21 facing challenges in the Senate, regulatory clarity remains uncertain. Hougan comments,
“The tide has changed, but the water hasn’t come in yet. Wake me up when the action happens.”
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