Bitwise CIO Matt Hougan weighed in on the Securities and Exchange Commission (SEC) Chair’s recent speech announcing the regulator’s new initiative to develop the digital crypto industry.
Project Crypto, The ‘Most Bullish’ Document
On Tuesday, Bitwise CIO Matt Hougan discussed the SEC Chair’s recent speech, titled “American Leadership in the Digital Finance Revolution.” In a memo to clients, Hougan affirmed that “the most bullish document (…) on crypto wasn’t written by some Yahoo on Twitter. It was written by the chairman of the SEC.”
As reported by Bitcoinist, Paul Atkins outlined his vision for the financial markets over the next years in a speech to the America First Policy Institute. In the speech, the SEC Chain unveiled the “Project Crypto” initiative, which aims to transform the US into the “crypto capital of the world.”
The commission-wide initiative is expected to modernize securities rules and regulations, enabling US financial markets to move on-chain and “help ensure that the United States remains the best place in the world to start a business, develop cutting-edge technologies, and participate in capital markets.”
Atkins’s speech is “the most complete vision of how crypto can reshape financial markets,” the Bitwise CIO affirmed, arguing that it seems like the SEC Chair “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 suggested that the most obvious question is whether the SEC’s vision was priced in. If the markets were already anticipating the SEC shift from “crypto antagonist to crypto catalyst,” then it should already be factored into the price of most digital assets.
Nonetheless, he argued that he realized it is time to “think bigger” and “move to a faster timeline” after reading the speech, concluding that “If it wasn’t priced in for me, I’m going to guess it wasn’t priced in for others.”
Opening The Door For Key Opportunities
In the memo, Hougan highlighted that there’s “a lot to unpack” from Atkins’s remarks, “you could build an entire venture capital firm around the chairman’s vision, creating companies to capitalize on each opportunity he lays out,” he continued.
However, he asserted that three immediate investment opportunities stand out, starting with investing in Ethereum and other Layer 1 blockchains that support stablecoins and tokenization.
He argued that, as US regulators and lawmakers work to modernize rules and create legal frameworks to bring the financial market on-chain, gaining exposure to the underlying platforms is crucial.
The best approach is likely to buy a basket of the leading assets: Ethereum, Solana, Cardano, XRP, Avalanche, Aptos, Sui, NEAR, and so on.
A second opportunity rises in what Atkins called “Super-Apps,” which are platforms offering a broader range of financial services. In the speech, the SEC chair argued that broker-dealers should be able to offer crypto and traditional trading, and services like staking and lending, without “requiring fifty-plus state licenses or multiple federal licenses.”
To Bitwise CIO, platforms like Coinbase and Robinhood have embraced the super-app concept and “could become the largest financial services company in the world, maybe even becoming the first financial services company worth more than $1 trillion,” with the SEC’s roadmap.
Lastly, Hougan affirmed that DeFi applications are another major opportunity standing out, explaining that these apps have surged in a “regulatory gray zone” that has constrained their growth.
“DeFi is not just a technical revolution, but a conceptual one. And the chairman of the SEC gets it,” he highlighted, predicting that with more regulatory clarity underway, the sector could surge.
Despite the lack of regulatory clarity, DeFi apps have significant usage. (….) With greater clarity, could these numbers rise by 10x? 50x? 100x? As traditional and crypto markets merge, the opportunity is huge.
