Is there a convergence between cryptocurrencies, Wall Street, and Washington? This is the question raised by Matt Hougan, the Chief Investment Officer of Bitwise, in his recent article. He analyzes the upcoming decision on the Ethereum ETF and the changing attitude of US regulatory agencies towards cryptocurrencies. While the approval of the ETF is still uncertain at the time of writing, Hougan believes that the recent vote to overturn SAB 121 in the Senate is more significant and will have a positive impact on the cryptocurrency market, regardless of the ETF outcome.
Hougan explains that last week, a significant event took place in Washington. Senators from both parties voted in favor of legislation supporting cryptocurrencies, despite the threat of a veto from the White House. This is a positive signal for the future of cryptocurrencies.
The event in question is related to SAB 121, a rule implemented by the SEC in April 2022, which made it nearly impossible for Wall Street banks to offer custodial services for crypto assets. The rule required banks to treat these assets as liabilities on their balance sheets, making it economically unfeasible for them to provide custody services. As a result, only trusted entities like Coinbase Custody Trust Company LLC and Fidelity Digital Assets can offer such services.
Hougan argues that the implementation of SAB 121 was unfair and not in line with standard rule-making procedures. The GAO pointed out that the SEC should have followed standard procedures and allowed public and industry input before implementing the rule. The vote to overturn SAB 121 opens the door for further scrutiny of the rule by Congress.
The interesting aspect of this event is the unity between Democrats and Republicans. Hougan suggests that the support for overturning SAB 121 is driven by the financial interests of Wall Street, which now sees the potential profits in offering custodial services for cryptocurrencies. This unity signifies a “new alliance” between cryptocurrencies, Wall Street, and Washington.
Hougan concludes that this alliance, while not perfect, will pave the way for further growth in the cryptocurrency market. Whether it’s expanding custodial services or increasing demand for stablecoins, each step taken by this alliance will contribute to the mainstream adoption of cryptocurrencies.
In conclusion, Hougan believes that the changing attitude in Washington is the best evidence that cryptocurrencies are moving towards mainstream adoption and will reach new all-time highs, regardless of the approval of the Ethereum ETF.
[Note: This translation is a direct translation of the article and may not reflect the opinions of the translator.]