The recent US presidential election has brought a lot of hope to the crypto space. Matt Hougan, CIO at Bitwise Asset Management, is calling it a “golden age” for digital assets under the Trump administration.
Anticipated Regulatory Reforms Under the New Administration
Hougan says the Trump administration will make big changes in the first 100 days to get the regulatory handcuffs off the industry. He said, “We are entering the golden age of crypto” the industry has been operating with “one or maybe two arms tied behind its back” due to the SEC and regulatory uncertainty.
One of the reforms is the removal of SEC Chair Gary Gensler who has been tough on crypto. Trump plans to appoint someone more crypto friendly so the industry can innovate and grow.
Market Indicators Reflecting a Bullish Trend and The Implications
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Before the election the market was already showing signs of growth. $23 billion has flowed into Bitcoin ETFs this year and institutional interest is increasing. The Bitcoin halving which reduces the block reward has historically been a price driver. The expansion of real world applications like stablecoins, prediction markets and gaming is a sign of the sector maturing and being integrated into the mainstream financial system.
Hougan also points out that the US national debt is now $36 trillion and growing at a rate of $1 trillion every 100 days. This debt may make decentralized systems and assets like Bitcoin more appealing as a hedge against traditional economic instability. Inflation and currency devaluation could drive institutional and retail investors to cryptos as an alternative store of value.
Cautionary Note on Crypto Market Selectivity
Despite his positivity, Hougan cautions investors to be wise. He says the regulatory changes will level the playing field but not all projects will win. “All yesterday’s election did was level the playing field. There are good and bad projects in crypto, things that will win in this level playing field and things that will lose,” he said.
This means we need to do our due diligence and make smart investment decisions in the crypto space. The overall environment will get better but individual project viability will still depend on tech innovation, market adoption and good governance.
So there you have it, the intersection of politics and markets points to a good future for crypto. The regulatory changes under Trump and the existing market and macro conditions of rising national debt puts the industry on the verge of big growth. But as Hougan said, ‘we need to be wise’.
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