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Author: Matt Hougan, Chief Investment Officer of Bitwise; Translated by: AIMan@Bitlink Vision
Summary: The most optimistic document I have read about cryptocurrencies was not written by Twitter users, but by the US SEC Chairman.
Last week, U.S. SEC Chairman Paul Atkins delivered a speech at the U.S. Priority Policy InstituteUplinking the U.S. financial market”.
You should read it now.
No, seriously.Go and read it.This is the roadmap for investment in the next five years.
In his speech, the US SEC elaborated on his vision for the future way financial markets work.Spoiler warning: It all revolves around public chains like Ethereum.He believes:
● All assets (stocks, bonds, US dollars, etc.) will eventually be transferred through the public chain.
● DeFi will play an important role in our future.
● Crypto assets and blockchain can create exciting new business models.
● The main factor that hinders us from carrying out this “revolution” is the harsh regulatory environment, and now, this situation has undergone a 180-degree transformation.
This is the most complete view I have read about how cryptocurrencies can reshape financial markets.
I can’t imagine that after reading this speech, you wouldn’t want to put a large portion of your money into cryptocurrencies; or, if you’re in the finance industry, you wouldn’t want to put a large portion of your career into cryptocurrencies.It’s like the U.S. SEC president packed all the best ideas that cryptocurrency supporters have been promoting over the past decade into a speech and detailed how the U.S. SEC really implements these ideas.
“This is an opportunity for a generation,” he wrote.
A few years ago, I wasn’t sure if my compliance department would allow me to say that.
What does this mean for investors
There is a lot to be read by this speech; you can build an entire venture capital firm around the vision of the US SEC president and build a company that can seize every opportunity he proposes.But in my opinion, there are three immediate investment opportunities that are particularly prominent.
Opportunity 1: Ethereum (and other Layer 1 blockchains)
The first and most obvious opportunity is investing in Ethereum and other L1 blockchains that support stablecoins and tokenization.
“Today I announced the launch of ‘Project Crypto’, a SEC full-scale initiative that aims to update securities rules and regulations to enable U.S. financial markets to be on the chain,” Atkins wrote.
It doesn’t take a genius to see this: if almost all assets will be transferred to public chains, then you’ll want to hold these blockchains.
What public chains are there?
The best way to do this is probably to buy a basket of leading assets: Ethereum, Solana, Cardano, XRP, Avalanche, Aptos, Sui, NEAR, and more.
I know some readers will say: Ethereum is obviously the dominant chain of tokenization and stablecoins.I agree!It is indeed at the forefront.But I have witnessed the rise of digital trading in the early 21st century—the last major upgrade of our financial system—and I remember early market leaders were companies like Island ECN and Instinet.
Have you heard of these recently?I have never heard of it.However, Nasdaq’s stock price has risen 2275% since its listing in July 2002.
The indexing method allows you to buy a basket of assets and get in touch with the best of them, whatever they are.
Opportunity 2: Coinbase, Robinhood and other “superapps”
The most instructive part of the speech was the section titled “Promoting Super Applications: Horizontal Integration of Product Supply.”In it, Atkins describes the future scenario where a single application can provide a large number of financial services to customers.
“Brokers with alternative trading systems should be able to offer non-security crypto asset trading as well as crypto asset securities, traditional securities and other services such as crypto asset pledge and borrowing without the need for licenses from more than 50 states or multiple federal licenses,” Atkins said.
It’s hard not to think of Coinbase and Robinhood, both companies that embrace the concept of superapps, despite their different stages: Coinbase starts with cryptocurrencies and then moves to traditional assets, while Robinhood starts with traditional assets and then quickly moves to cryptocurrencies.
I dare to predict it boldly: one of these companies may become the world’s largest financial services company, or even the first financial services company with a market value of more than $1 trillion.Atkins just gave them a roadmap.
Opportunity 3: DeFi Application
The last opportunity mentioned in Atkin’s speech is decentralized finance, referred to as DeFi.
DeFi applications have always been in a regulatory gray area, neither subject to existing regulations nor are explicitly prohibited.This hinders their development: DeFi applications are widely used by cryptocurrency enthusiasts, but adoption rates for mainstream investors or institutions are almost zero.
In a speech section titled “Release the American Market: Big and Beautiful On-chain Software System,” Atkins elaborated on why regulators struggle to understand the concept of DeFi:
Decentralized financial software systems (such as automatic market makers) promote automated, non-mediated financial market activities.The federal securities law has always assumed that the participation of intermediaries requires supervision, but this does not mean that we should intervene in order to force intermediaries, and the market can operate normally without intermediaries.
In other words: DeFi is not only a technological revolution, but also a concept revolution.The US SEC Chairman is well aware of this.
Despite unclear regulation, the utilization rate of DeFi applications remains high.Uniswap, the largest spot trading app, hit a record high in June with trading volume of $88 billion.DeFi lending agreements such as Aave also hit new highs, with a total lock-in value of $56 billion.Derivative platforms such as Hyperliquid are huge in scale.
Can these numbers grow 10 times, 50 times, 100 times, if understood more clearly?With the convergence of traditional markets and cryptocurrency markets, opportunities are enormous.
Critics point out that most DeFi tokens have no clear economic connection to their underlying protocols.Uniswap’s UNI token, for example, is a “government token,” which means holders have a say in the direction of the Uniswap protocol, but will not benefit from the transaction fees charged by the platform.
I suspect this is the legacy of the harsh regulatory environment in the past.Under the new vision of the US SEC, assets like UNI can create more direct economic ties with their underlying agreements, thus unlocking huge value.
The key question is?
The most obvious question about Atkins’ vision is whether it has been priced.If the market has already anticipated this shift in the U.S. SEC – from opponents of cryptocurrencies to catalysts of cryptocurrencies – it should have been included in the prices of Ethereum, Solana, Uniswap and other assets.
perhaps.
But what I want to say in the end is: This speech caught me off guard.
I have been constantly researching and writing about cryptocurrencies for the past eight years.I’ve always been optimistic about the future of cryptocurrencies and said that all assets will eventually run on a blockchain-based track.But after reading the speech, I realized that I had to look at the wider world and move in a faster direction.
If I didn’t take that into account, I guess others wouldn’t take it into account either.
