SEC's Crypto-Friendly Shift Still Underpriced by Markets: Bitwise

The U.S. Securities and Exchange Commission (SEC) has signaled a more crypto-friendly regulatory approach, yet its full impact on market valuations remains underestimated, according to Matt Hougan, chief investment officer at Bitwise. In a recent speech, SEC Chair Paul Atkins outlined a vision for blockchain innovation, decentralized finance (DeFi), and financial super apps that Hougan described as "the most bullish document I’ve read on crypto." This shift, he argues, has not yet been reflected in investor behavior or asset prices [1].

Atkins’ speech, delivered at the America First Policy Institute, emphasized the importance of regulatory frameworks that support rather than stifle innovation in the crypto space. Hougan noted that the document, authored by the head of the country’s top securities regulator, consolidated key ideas from crypto advocates over the past decade—now being championed by an agency once seen as a major obstacle to industry growth. He questioned whether both he and the broader market had fully priced in the magnitude of the policy change [1].

Since the election of President Donald Trump and the resignation of former SEC Chair Gary Gensler, crypto markets have experienced a significant resurgence. Bitcoin reached new all-time highs following Gensler’s departure on January 20 and again after Atkins took office on April 21. Under the new leadership, the SEC has taken a more accommodating stance, including shelving enforcement actions against crypto firms and launching “Project Crypto,” a framework aimed at providing regulatory clarity [1].

Despite these developments, Hougan believes the market is still in the early stages of comprehending the long-term implications. "I’m realizing I have to think bigger—and move to a faster timeline," he said, adding that the speech’s significance might have been overlooked by many investors. Hougan argued that the speech provided a roadmap for crypto firms, particularly those adopting the super app model like Coinbase and Robinhood, to evolve into major financial institutions [1].

Atkins also highlighted the transformative potential of public blockchains and DeFi. Hougan speculated that if traditional assets such as stocks and currencies transition to public blockchains, investor demand for exposure to those networks would rise. DeFi, which has long operated in a legal gray area, could also see exponential growth with clearer regulatory guidance. Hougan suggested that DeFi’s current user base could expand by 10x, 50x, or even 100x under the right conditions [1].

The shift in regulatory tone aligns with broader industry developments. Recent updates on liquid staking tokens and the SEC’s ongoing dialogue with crypto firms are seen as positive indicators of a more favorable environment. However, market participants have been slow to adjust their expectations, according to Bitwise’s assessment [2].

The market’s cautious response may also be influenced by lingering regulatory uncertainty. Earlier this year, the SEC paused Bitwise’s attempt to convert its crypto index fund into an ETF, a move interpreted as regulatory hesitation. Yet, recent statements from Atkins indicate a clear pivot toward making the U.S. a global hub for digital assets [3].

In parallel, Deloitte’s CFO Signals Survey revealed that North American CFOs are anticipating an uptick in corporate cryptocurrency adoption, suggesting growing interest in the asset class [4]. However, institutional adoption remains cautious, with many firms still evaluating the long-term risks and viability of crypto assets. This hesitance may explain why the recent regulatory shifts are not yet fully priced in, as investors continue to assess their implications [4].

Meanwhile, companies like Coinbase have been proactive in leveraging regulatory clarity. The firm recently rebranded its wallet as the Base App, aiming to position itself as a "superapp" for crypto services including trading, payments, and messaging [5]. These moves, alongside the SEC’s evolving stance, are expected to support the maturation of the crypto market. Still, Bitwise’s CIO argues that the full realization of the regulatory pivot will take time [5].

As the industry advances, innovation continues even in the absence of clear regulatory guidelines. For example, Axiom Exchange has made strides in DeFi trading on Solana, and Ledger has expanded partnerships with major sports teams like the NBA’s San Antonio Spurs. These developments highlight the industry’s independent growth, although regulatory clarity remains a critical enabler for widespread adoption [6].

The evolving balance between innovation and regulation is likely to remain a central theme in the crypto space. Bitwise’s assertion that the SEC’s pivot is still underpriced underscores the need for investors to remain vigilant and adaptable. With regulatory frameworks still in flux, the full impact of these changes on asset prices and market behavior is yet to materialize [1].

Sources:

[1] title: SEC Crypto Pivot Still Not Priced In: Bitwise Executive (url: https://coinmarketcap.com/community/articles/68931ab6e874124e573c79e3/)

[2] title: BTCUSD - SEC's guidance on liquid staking tokens a win for (url: https://mx.advfn.com/bolsa-de-valores/COIN/BTCUSD/crypto-news/96569412/sec-039-s-guidance-on-liquid-staking-tokens-a-win)

[3] title: SEC Chair Paul Atkins Now Focused on Making US the Global Crypto Hub (url: https://www.crowdfundinsider.com/2025/06/199545-sec-chair-paul-atkins-now-focused-on-making-us-the-global-crypto-hub/)

[4] title: North American CFOs Expect Uptick in Corporate Cryptocurrency Adoption : Research (url: https://www.crowdfundinsider.com/2025/08/202555-north-american-cfos-expect-uptick-in-corporate-cryptocurrency-adoption-research/)

[5] title: Coinbase Rebrands Wallet as Base App, Launching a Crypto Superapp (url: https://www.crowdfundinsider.com/2025/07/202350-coinbase-rebrands-wallet-as-base-app-launching-a-crypto-superapp/)

[6] title: French Crypto Hardware Wallet Firm Ledger Teams Up with San Antonio Spurs (url: https://www.crowdfundinsider.com/2025/07/202150-french-crypto-hardware-wallet-firm-ledger-teams-up-with-san-antonio-spurs/)