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Bitwise investment chief Matt Hougan has hailed a recent speech from Securities and Exchange Commission Chair Paul Atkins as “the most bullish document” on cryptocurrencies, outlining sectors that are likely to benefit from the initiative.
In a speech to the American Policy Institute last week, Atkins introduced “Project Crypto” as an initiative to update U.S. rules to allow the financial market to move on-chain. Beyond defining the initiative, he outlined concrete steps the agency intended to take to achieve the goal in the coming months.
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“It’s the most complete vision of how crypto can reshape financial markets that I’ve read,” Hougan said in a Tuesday note. “I can’t imagine reading the speech and not wanting to allocate a significant portion of your capital to crypto.”
But which cryptocurrency assets in particular should you bet on?
The most obvious plays are leading Layer 1 blockchains, such as Ethereum, Solana, XRP and Cardano, which are likely to host the financial market tokenization envisioned by Atkins. But instead of picking winners, Hougan recommends an index approach.
“Having watched the emergence of digital trading in the early 2000s—the last major upgrade of our financial system—I remember that the early market leaders were firms like Island ECN and Instinet,” he wrote. Heard of those lately? Me neither. But Nasdaq’s stock is up 2,275% since it started trading in July 2002.”
Several cryptocurrency index fund issuers, including Bitwise, have filed to convert their funds into exchange-traded funds that are more easily accessible to retail investors. A number of these applications, including Bitwise’s offering, have received approvals that have been stayed pending an SEC review.
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The next opportunity lies in “Super-Apps,” Hougan said.
Atkins last week defined super-apps as platforms that offer a broad range of financial products and services “under one roof with a single license.”
According to Hougan, Coinbase (NASDAQ:COIN) and Robinhood (NASDAQ:HOOD) are the obvious players moving in this direction.
“One of these companies could become the largest financial services company in the world, maybe even becoming the first financial services company worth more than $1 trillion,” Hougan said. “Atkins just gave them a roadmap.”
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The final category that could benefit from “Project Crypto,” according to Hougan, is decentralized finance applications.
Atkins last week said these applications should have a place in the U.S. financial market, adding that regulators did not need to try to impose intermediation where it was not necessary.
Hougan highlighted that regulatory clarity could unlock significant growth for DeFi applications like Uniswap, Hyperliquid and Aave, which are already processing billions of dollars even without clarity.
“As traditional and crypto markets merge, the opportunity is huge,” he said.
Hougan said that the SEC’s recent pivot had likely not been priced into the markets.
“I’ve long been bullish about the future of crypto, and I’ve said that all assets will eventually move over blockchain-based rails,” he said. But after reading the speech, I’m realizing I have to think bigger—and move to a faster timeline. If it wasn’t priced in for me, I’m going to guess it wasn’t priced in for others.”
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This article These Are The Three Investments That Will Benefit From The SEC’s ‘Project Crypto,’ According To Bitwise originally appeared on Benzinga.com