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Earlier this month, U.S. President Joe Biden signed the highly anticipated crypto executive order directing federal agencies to coordinate their efforts at crypto regulation. The move was viewed positively by the digital asset industry as it was seen as the first step towards regulatory clarity in the space.
In fact, some experts are extremely bullish on the EO’s potential impact on the crypto market in the long run. For instance, Bitwise CIO Matt Hougan believes that the executive order could set the stage for the next bull market.
“The executive order is the signal that we are entering a new bull market phase in the crypto market,” Hougan said in an interview with CNBC Crypto World. “I think it’s that important.”
The executive expressed satisfaction with the directive describing it as balanced is it takes into consideration both the opportunities and the risks associated with digital currencies. “The big question coming into the executive order was whether it was going to be balanced, whether it was going to talk about both the risks and the opportunities of crypto,” he said. “Based on our initial read of what’s in there, it does exactly that.”
The lack of regulatory clarity is one of the barriers stifling crypto’s mainstream adoption and the growth of the digital asset market. Hougan believes that the executive order is the first step towards this highly sought regulatory clarity.
“The crypto market needs better and clearer regulation if it’s going to go truly mainstream - if it’s going to go from a one and a half-trillion dollar industry to a 15 trillion dollar industry,” he added. “What we got here was sort of a shotgun start telling all regulators to push that forward, do so in a way that protects investors but that doesn’t throw the baby out with the bathwater, that keeps the economic development here in the US. I think it’s pretty close to the outcome we are all hoping for.”
“That’s why you’re seeing markets rally today,” he added. “I suspect the rally will continue for the rest of the year.”
Hougan revealed that his firm surveyed financial advisers last December and found out that the number one concern preventing advisers from allocating in crypto is lack of regulatory clarity. In fact, his clients are more concerned about unclear regulations than price volatility and concerns about valuations.
“We haven’t gone from zero to 100 on regulatory clarity with this executive order, but what we have done is go from zero to one,” the executive explained. “We’ve taken the first step to establish a true regulatory regime for crypto.”
“I do think this is a signal moment and I do think it sets the stage for a bull market that could last at least through this year and potentially beyond,” Hougan said.
