The chief investment officer of crypto asset management firm Bitwise says there has been a sea change in crypto, increasing the likelihood of upside moves.
In a new blog post, Bitwise CIO Matt Hougan says the digital industry is “not optimistic enough” as blue chip and government interest in digital assets increases.
According to Hougan, the thought that Congress would adopt clear crypto guidelines and that Wall Street players would embrace crypto more widely are no longer fantasy scenarios.
“As crypto investors, we spend a lot of time on downside risk. We are all well aware that an event could occur at any time that would drive prices sharply downwards. It’s quite common for people to say that bitcoin can ‘go to zero’. I think we have to accept that there is now an equally high risk to the uptrend.
Could we wake up tomorrow and find that a G20 country has added Bitcoin to its balance sheet, aiming to outpace the US? Could comprehensive crypto legislation in the US be passed sooner than expected as bipartisan support grows stronger? Could Wall Street embrace crypto en masse, on a scale far greater than most expect? (Today, Goldman Sachs CEO David Solomon told CNBC that Bitcoin could be a store of value).
These ideas would have been the stuff of daydreams a year ago. But after what I saw last week, they seem more likely than not.
Earlier this week, Republican Senator Cynthia Lummis of Wyoming proposed that the US government collect 5% of the total supply of BTC to use as a reserve as a means to strengthen the US dollar.
Hougan says the US government’s policy shift towards Bitcoin (BTC) is an indication that Washington’s view on digital assets has changed.
“Regardless, the fact remains: Washington’s sense of what’s possible in crypto has changed. A year ago, the SEC charged Coinbase with operating an illegal stock exchange.
Now the US Department of Justice is working with Coinbase to secure its crypto – and we are talking about the US holding Bitcoin as a reserve.”
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Generated image: Midjourney