Bitwise CEO believes “the next crypto bull market will be driven by …”

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The cryptocurrency industry had a banner year in 2021, not only in terms of new investors and growing acceptance by the general public, but also in terms of the introduction of a range of new investment products. This includes the highly anticipated launch of the US’s first Bitcoin ETF, which followed years of rallying and provocation by digital asset enthusiasts.

Even though the ProShares Bitcoin Strategy (BITO) ETF opened in record numbers when it launched in October, a large chunk of investors were disappointed as only ETFs backed by Bitcoin futures are currently allowed to trade. by the Securities and Exchange Commission. (SECOND).

The SEC’s reluctance to a spot BTC ETF, manifested in its frequent rejection of such requests, has prompted many asset managers to move north to more friendly Canada or even to completely withdraw their requests.

Matthew Hougan, CEO of leading crypto asset manager Bitwise, believes that while the launch of BITO is an important time for the ecosystem as it will signal significant growth and inflow of capital, it may not be the best product for avid investors.

In a recent podcast, the executive noted,

“It’s an imperfect product, no one likes it. It’s great if you trade Bitcoin for a week, it’s not that great if you hold it for a year… it’s just not a suitable product… The story that this was going to be the product that would allow this institutional wall of money, coming afloat is a false story.

Interestingly, futures ETFs that invest in contracts used to speculate on future BTC prices, are in fact underperforming cash bitcoin, forcing anyone to doubt the SEC’s intention to “protect them.” investors ”.

One of the downsides of futures ETFs is their lack of appeal to financial advisers, who control much of America’s wealth and “simply won’t buy crypto exposure on a phone app for their clients.”

Hougan further noted that while a BTC ETF would be a more viable option for this sect, “the futures product is not something that can be described as optimal exposure to the asset.”

However, a silver lining can be seen in the government’s past treatment of investment products, according to the CEO, as Congress appeared to be wary of ETFs when they were first introduced as a product. investment in 1993.

This could serve as a lesson for the current crypto market, Hougan said,

“It doesn’t always have to be that kind of skeptical world. Through persistent lobbying, facts and analysis, you can move on to a future where it is adopted as normal. “

The congressional hearings that several crypto CEOs have been going through in recent times as well as the government’s increased interest in the industry could be seen as a positive step in that direction. A full crypto bill is even expected to be proposed by Congresswoman Lummis early next year.

Emphasizing the same, Hougan concluded,

“I believe the next crypto bull market will be driven by positive regulatory developments and I believe it will arrive sooner than expected.”

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