Matt Hougan's Five Forces Shaping Crypto's Future

Bitwise Asset Management Chief Investment Officer Matt Hougan outlined what he believes will power a new bull cycle in crypto, one he said has the potential to be more durable than the boom-and-bust runs that preceded it.

Bitwise, founded in 2017, is one of the larger crypto-focused asset managers and builds its business around exchange-traded funds and research aimed at financial advisors.

Speaking on a September 9 webinar hosted by financial advisor Ric Edelman, founder of the Digital Assets Council of Financial Professionals (DACFP), Hougan argued that, unlike past cycles driven by a single catalyst, this one is being driven by five forces compounding at once - regulatory tailwinds, institutional adoption, stablecoins and tokenization, on-chain finance and revenue-generating tokens - each reinforcing the others rather than standing alone.

Regulation: From headwind to tailwind

On regulation, Hougan said the SEC under current Chair Paul Atkins has dropped the enforcement actions the agency brought against major exchanges during Gary Gensler’s tenure and ended what he described as “debanking” pressure on crypto firms.

Under Gensler, the agency sued nearly every major exchange and treated most crypto assets other than Bitcoin as unregistered securities, pushing firms to debank and entrepreneurs offshore. Atkins’ SEC has dismissed those suits, as well as litigation against Coinbase and Kraken, and his Project Crypto initiative has continued loosening rules around token trading.