Bitwise CIO Matt Hougan: The U.S. is Missing a Key Crypto Window
Bitwise Chief Investment Officer Matt Hougan publicly commented on U.S. crypto policy, warning that the U.S. is missing a critical window that could make the crypto industry safer, attract more investment, and maintain its dominance in global financial markets for the next 50 years. This opportunity is being sacrificed for short-term political gains.
On the "safety" aspect, Hougan's core argument is that a clear and enforceable regulatory framework could reduce fraud and operational risks within the industry, providing clearer compliance boundaries for ordinary investors and institutional funds, rather than allowing the market to continue operating in a regulatory gray area.
Regarding "driving investment," he believes that clear rules are a prerequisite for institutional capital to enter the market. As long as regulatory jurisdiction and compliance pathways remain uncertain in the long term, large-scale long-term capital such as pensions and insurance funds will find it difficult to allocate significant resources to crypto assets, thereby limiting the pace of industry financing and innovation.
On the "50-year financial leadership" aspect, Hougan elevates the issue of crypto regulation to a national strategic level: he believes that if the U.S. can establish a mature and predictable crypto regulatory system first, it will have the opportunity to keep global crypto capital, trading, and innovation activities within the U.S., thus continuing its global pricing power and clearinghouse status from the traditional financial era.
His criticism of the current situation centers on the belief that decision-makers are prioritizing this long-term strategic opportunity over short-term political games and party interests, specifically manifested in the legislative and regulatory processes being dominated by political cycles rather than industry needs, leading to delayed rule formation.
From a market mechanism perspective, regulatory uncertainty itself is a form of "implicit cost": it raises the compliance and legal risk premium for institutional funds entering the U.S. crypto market, objectively increasing the motivation for capital to shift to the EU (under the MiCA framework), the Middle East, or certain jurisdictions in Asia. Once capital and innovation activities shift, the beneficiaries will be jurisdictions that provide certainty in rules first, while U.S. domestic exchanges, asset management institutions, and developer ecosystems will be under pressure as they remain in a regulatory gray area.
Bitwise itself is one of the major crypto asset management firms in the U.S., established in 2017, and was among the first to launch cryptocurrency index funds. It is now one of the main issuers in the wave of approvals for U.S. spot Bitcoin ETFs in 2024, with its business model highly dependent on the clarity of the U.S. regulatory environment and the pace of institutional capital entry.
Source: Public information
ABAB AI Insight
Since its establishment in 2017, Bitwise has focused on "packaging crypto assets for compliance": it launched cryptocurrency index funds in its early years and has continuously applied to the SEC for a Bitcoin spot ETF. After several rejections, it finally caught the window for the approval of the first Bitcoin spot ETFs in the U.S. in early 2024, alongside traditional asset management giants like BlackRock and Fidelity. This history determines Bitwise's path dependence: its growth is highly tied to whether "regulators provide clear permission."
Therefore, the capital path logic behind Hougan's remarks is not complex: regulatory clarity directly determines whether institutional funds can flow into crypto assets on a large scale, and as an asset manager, Bitwise's growth in assets under management (AUM) is itself a downstream product of regulatory certainty. His call for establishing safer and clearer rules is essentially paving the way for its products to reach long-term capital like pensions and insurance funds, which is a typical expression of the "high alignment of industry spokesperson views with their own business interests."
Similar games have been seen in history: the EU established a comprehensive crypto regulatory framework through MiCA, objectively attracting some exchanges and issuers to relocate their compliance entities to Europe; the traditional U.S. financial industry also experienced debates about "regulatory lag hindering the industry from staying domestic" in the early stages of emerging industries like the internet and telecommunications. The current stage of the crypto industry is a critical window transitioning from "barbaric growth" to "rule formation"; whoever completes this transition first is more likely to capture global capital and talent.
This essentially belongs to a "structural game driven by regulatory changes": mechanism-wise, the authority to formulate regulatory rules itself is a form of allocation power over global capital flows—jurisdictions that issue rules early and have clear boundaries will first attract institutional funds and innovative projects seeking compliance certainty; while jurisdictions with delayed rules, even if they have a first-mover market size advantage, may gradually yield in the marginal flow of capital and talent. The essence of Hougan's remarks is redefining "regulatory progress" as a strategic resource that can be outpaced by other countries and regions.
ABAB News · Law of Cognition
- One day of regulatory delay allows competitor countries to run one more day.
- Short-term political calculations are often repaid with long-term leadership.
- Whoever establishes the rules first will capture global capital first.