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- The crypto market has entered a bull run, driven by optimism around pro-crypto policies and regulatory clarity expected in the United States.
- Matt Hougan of Bitwise highlighted that groundbreaking ideas in cryptocurrency are suddenly feasible, such as a US Bitcoin Reserve.
- Regulatory changes, including the likely departure of SEC Chair Gary Gensler, are reducing uncertainty around the market.
- Hougan advises investors to adopt index-based strategies to navigate the market safely.
Alright, we can say it without jinxing anything – the crypto market has entered another bull run.
Everyone expected a Donald Trump election victory to spell good news for the industry, but the overwhelming optimism may have surprised even the most bullish investors.
The most exciting part about Bitcoin’s unquenchable thirst for setting new all-time-highs is that this may just be the beginning.
With new, pro-crypto policies and administrations expected to hit the United States over the coming 12 months, the use case for digital currencies is likely to soar.
In a blog post for investors, the Chief Investment Officer of Bitwise, Matt Hougan, spoke to the current market state and what we can expect going forward.
Related: Experts Unpack the Complexity of a US Bitcoin Reserve: Low on Priority List
“Anything is Possible”, Regulatory Clarity to Shape Crypto Industry
Hougan kicks off his article by noting the influx of once-crazy ideas that are now looking like they could become reality.
For example:
- A Bitcoin reserve, although unlikely to pass the Senate, is being worked upon by several pro-crypto advocates in the US Government. Senator Cynthia Lummis “shared a proposal to have the US Government sell a portion of its gold reserves to purchase one million Bitcoin.”
- The SEC was sued by 18 Republican Senators over its conduct toward the crypto sphere.
- BlackRock’s tokenised fund, BUIDL, improved its interoperability and now works upon Aptos, Arbitrum, Avalanche, Optimism and Polygon.
Hougan believes that regulatory uncertainty is finally leaving the industry – a sentiment that…coincidentally…corresponds with Gary Gensler’s likely departure from the SEC.
Put it together, and Hougan says “anything is possible in crypto over the next four years.”
Hougan Pushes Crypto Indexes as a Risk-Averse Strategy to Navigate the Bull Market
Despite the overwhelming sense of optimism, the ongoing bull market can be difficult to navigate for investors – especially new ones.
For every winner that emerges during periods of high liquidity, there are hundreds of pump-and-dump schemes and scam tokens that lure unsuspecting victims.
Although greater regulatory clarity will help protect investors in some regard, the unfortunate reality is that more money in the industry equals more bad actors trying to exploit it.
Given the uncertainty, Hougan has some sage advice for those looking to enter the crypto markets: hedge your bets.
Related: Bitcoin Moves Past Silver, Saudi Aramco as World’s 7th Largest Asset while PEPE, DOGE Lead Meme Coin Surge
Hougan believes that indexes – baskets of assets that provide investors exposure to a multitude of top-performing cryptocurrencies – will likely outperform single “bets” over a large sample size.
There’s wisdom in buying the big picture…Sometimes you don’t know…whether AltaVista or Google is going to win out, but you know internet search is going to change the world. Indexes give you a way to participate in the growth and excitement of a new field without having to…make a specific call.
Matt Hougan, CIO at Bitwise