Crypto Market May Be Undervalued Amid SEC’s Shift, Bitwise CIO Suggests
In a notable development for the cryptocurrency sector, industry experts believe that the recent change in tone from the U.S. Securities and Exchange Commission (SEC) toward digital assets may not yet be fully reflected in current crypto valuations. Matt Hougan, Chief Investment Officer at Bitwise Asset Management, expressed optimism about the crypto market’s growth potential following a recent speech by SEC Chair Paul Atkins.
SEC Chair Paul Atkins Delivers Bullish Vision for Crypto
On July 31, Paul Atkins addressed attendees at the America First Policy Institute, outlining a progressive vision for how blockchain technology could be integrated into the financial markets. Hougan described Atkins’ speech as “the most bullish document I’ve read on crypto,” emphasizing that such positive messaging coming directly from the SEC chair was unexpected. He remarked that the speech caught him “off guard” and prompted serious reconsideration of investment strategies around crypto assets.
Hougan noted, “I can’t imagine reading the speech and not wanting to allocate a significant portion of your capital to crypto, or, if you work in finance, a significant portion of your career.” This sentiment highlights a shift from prior regulatory approaches that were often viewed as hostile or uncertain by crypto market participants.
SEC’s Recent Actions Signal Regulatory Clarity and Support
Since Donald Trump’s presidential campaign promise to change SEC leadership, the crypto markets have seen significant price rallies. Bitcoin reached new all-time highs after former SEC Chair Gary Gensler’s resignation in January 2021 and surged again with Paul Atkins’ appointment in April 2023. Under Atkins, the SEC has moved to dismiss long-standing enforcement actions against crypto firms and introduced Project Crypto—a regulatory initiative aimed at creating clear, structured guidelines for crypto businesses.
Despite these advances, Hougan believes the market may still be underestimating the full impact of these changes. “I’m realizing I have to think bigger—and move to a faster timeline. If it wasn’t priced in for me, I’m going to guess it wasn’t priced in for others,” he stated.
Key Highlights from Atkins’ Speech: Blockchain, Super Apps, and DeFi
Atkins emphasized the goal of enabling rules that do not hamper the growth of on-chain markets and suggested that a broad range of financial assets—including stocks, bonds, and dollars—could eventually migrate onto public blockchains. Hougan sees this as a strong indicator that exposure to public blockchains could be a lucrative investment opportunity.
Additionally, Atkins discussed the concept of “super apps,” platforms integrating multiple financial services, a trend already pursued by companies like Coinbase and Robinhood. Hougan speculated that such firms could potentially evolve into the largest financial services companies globally, possibly surpassing $1 trillion in valuation, with Atkins’ roadmap guiding their growth.
Decentralized finance (DeFi) applications are another sector likely to benefit from a clearer regulatory framework. Having operated in a regulatory gray area, DeFi platforms could experience significant expansion under a more supportive SEC regime. Hougan questioned whether usage and market size for DeFi might increase by multiples of 10, 50, or even 100 times as traditional and crypto markets converge.
Looking Ahead: Opportunity and Optimism in Crypto
The overall tone from both the SEC leadership and market insiders indicates growing optimism and alignment between regulators and the crypto industry. Atkins’ speech appears to reconcile many previous concerns by proposing a constructive path forward that balances innovation with investor protection.
For investors, this evolving regulatory clarity may present an opportunity to reconsider the current state of crypto asset pricing. As Bitwise’s Matt Hougan suggests, much of the SEC’s new stance “has not been priced in,” implying that the crypto market may be undervalued relative to its future potential.
As the United States continues to refine its crypto regulations, stakeholders across the financial and blockchain communities will be closely watching how these policies translate into market dynamics and technological adoption in the months and years ahead.