If people understand the impact of Washington’s change of attitude, the cryptocurrency market will reach a new all-time high.
Written by Matt Hougan, Chief Investment Officer at Bitwise
Translated by Luffy, Foresight News
Alpha, as defined on the Investopedia website, is the “ability of an investment strategy to outperform the market.” Alpha is rare because the market is highly competitive. To unlock Alpha, you need to know something that the market doesn’t.
This is difficult. Hedge funds, institutions, and high-frequency trading firms have extensive experience and invest billions of dollars, making them tough opponents to beat on the path to Alpha. Good luck!
This is why index investing is so popular and why most active fund managers fail to beat the market. Standard & Poor’s data shows that over the past 10 years, nearly 90% of active fund managers have underperformed the market.
I am a faithful believer in index investing. I help manage the world’s largest cryptocurrency index fund and wrote the foreword for Eric Balchunas’ book “The Bogle Effect,” which is about Jack Bogle, the founder of Vanguard and widely regarded as the “father of index investing.”
But occasionally, I also find Alpha in the market, and there’s nothing more exciting than that. And now, it’s such an exhilarating moment.
The unique gunshot in the world
As readers may know, Washington’s attitude toward cryptocurrencies has undergone a significant change in the past month.
In recent years, cryptocurrencies have been largely divided along partisan lines. Republicans generally support cryptocurrencies, while most Democrats hold a hostile stance.
One piece of evidence of the Democrats’ hostility toward cryptocurrencies is the “Anti-Cryptocurrency Coalition” plan announced by Senator Elizabeth Warren in March last year.
But in recent years, cryptocurrencies have been strengthening their political influence, including forming one of the top ten political action committees in Washington.
These efforts have paid off. The shift began on May 8 when 21 Democrats in the House of Representatives voted to repeal SAB 121, a ridiculous regulation established by the U.S. Securities and Exchange Commission to prevent large banks from custodizing crypto assets. A few days later, 10 Senate Democrats (including Senate Majority Leader Chuck Schumer) joined the Republican camp and voted to repeal the regulation. This is the first positive legislative action targeting cryptocurrencies in U.S. history.
Then, on May 20, shockingly, 71 Democrats voted in support of FIT21, comprehensive cryptocurrency legislation that grants the cryptocurrency-friendly Commodity Futures Trading Commission (CFTC) primary regulatory authority over cryptocurrencies, along with 208 Republicans. And more importantly, the U.S. Securities and Exchange Commission (SEC) led by Gary Gensler, appointed by the Democrats, approved the listing application for the Ethereum spot ETF, which was unexpected by many.
It needs to be made clear that from a political perspective, cryptocurrencies still have a long way to go. On Friday, President Biden vetoed the repeal bill for SAB 121.
But even so, it’s just a minor setback. We have been sailing smoothly in the crypto field for ten years. Finally, the wind is starting to shift.
Why this is Alpha
I believe this is Alpha because people don’t care about anything other than the cryptocurrency bubble.
In the past few weeks, I have been on the road attending various conferences, and despite my best efforts, this story still fails to resonate with people. I talked about the voting results, Warren’s anti-cryptocurrency coalition, and the unexpected progress of the Ethereum ETF, but people were dumbfounded.
This story is too complicated, and its impact is too distant. After all, Washington’s policies haven’t truly changed yet. The repeal of SAB 121 was vetoed, FIT21 is unlikely to pass in the Senate before the election, and the Ethereum ETF hasn’t been launched yet.
Although the direction of the trend is clear, it will still take time for the tide to rise. If people understand the impact of Washington’s shift, the cryptocurrency market will reach a new all-time high.
Let me give you an example.
U.S. financial advisors manage around $20 trillion in wealth. For the past six years, we have asked these advisors every year to share what hinders them from investing more in cryptocurrencies in their portfolios. For five consecutive years, the answer has been consistent: regulatory uncertainty. In our recent survey, this was the top concern for 64% of advisors.
So imagine how much of that $20 trillion will enter cryptocurrencies when the biggest obstacle is removed.
Take Wall Street as an example. In recent years, some of the largest banks have either abandoned cryptocurrencies or cautiously entered the field for the same reason. For example, JPMorgan, Nasdaq, and Fidelity Bank all announced plans to launch cryptocurrency custody services in the past two years, but these initiatives were eventually halted due to regulatory uncertainty.
If you think BlackRock’s entry into the cryptocurrency field had a positive impact on the market, imagine the unstoppable wave that will occur if the entire Wall Street embraces cryptocurrencies and sees them as an essential part.
The market will realize that we are entering a new era of cryptocurrencies, and this will propel the entire industry to new all-time highs.
Tags:
Bitwise
Ethereum
Senate
Index
United States
Source link:
https://foresightnews.pro/article/detail/61670
Note: The views expressed in this article by Bitwise represent the author’s opinions and do not constitute investment advice.
Original article link:
https://www.bitpush.news/articles/6841213
Related news
Nearly 500,000 tokens issued on Solana chain, why is it leading the pack?
The battle between big and small blocks is never-ending
[Daily Market Update] Bitfinex Analyst: BTC selling pressure may be nearing its end
Roaring Kitty returns? GME meme concept welcomes collective celebration
A $2 billion increase in market value in one week, reviewing NOT’s “massive wealth creation” operation.