New Era

2024

Bitcoin ETF

Bitcoin

The US Congress could catalyze a more significant shift than introducing <a href="https://bitcoinist.com/expert-flags-dangers-of-spot-bitcoin-etfs/" target="_blank" rel="noopener ">spot Bitcoin ETFs</a>. Bitwise Chief Investment Officer Matt Hougan’s view&nbsp;<a href="https://experts.bitwiseinvestments.com/cio-memos/stablecoins-bigger-than-bitcoin-etfs" target="_blank" rel="noopener nofollow">underscores</a> a pivotal moment for the crypto industry. 
Hougan suggests that 2024 could see “groundbreaking” legal frameworks that pave the way for mainstream stablecoin adoption, which might profoundly impact the crypto ecosystem. 
<h2 id="a-legislative-leap-forward">A Legislative Leap Forward</h2> 
Recent <a href="https://www.youtube.com/watch?v=7vLftqnwppc" target="_blank" rel="noopener nofollow">remarks</a> by Maxine Waters, Ranking Democrat of the House Financial Services Committee, highlighted progress towards stablecoin regulation. 
Waters’ announcement that she and Committee Chair Patrick McHenry are close to finalizing a <a href="https://bitcoinist.com/coin-center-opposes-unconsititutional-stablecoin/" target="_blank" rel="noopener ">stablecoin bill</a> indicates bipartisan momentum, which could soon materialize into law. 
Matt Hougan emphasized the underappreciated significance of this development in his recent communication to Bitwise clients. He believes comprehensive legislation could anchor stablecoins in the mainstream financial system, potentially enhancing their role in global economics. 
Hougan identifies multiple drivers behind the bipartisan push for stablecoin legislation. One significant factor is the potential for stablecoins to “bolster” the US dollar’s dominance as the global reserve currency. 
Moreover, stablecoins are major purchasers of US Treasuries, placing them among the top sovereign holders globally. 
<img loading="lazy" decoding="async" class="size-medium" src="https://www.tradingview.com/x/XHbDgUHc/" alt="The global crypto market cap value on TradingView" width="2770" height="1496"> 
The economic incentives are equally compelling, according to Hougan. For instance, <a href="https://bitcoinist.com/tether-splits-into-four-divisions/" target="_blank" rel="noopener ">Tether’s profitability</a> with minimal staff compared to traditional banking giants like <a href="https://bitcoinist.com/goldman-sachs-maintains-crypto-skepticism/" target="_blank" rel="noopener ">Goldman Sachs</a> illustrates the operational efficiency and financial potential of stablecoins. Such dynamics are enticing Wall Street to advocate for entry into the stablecoin arena. 
The Bitwise CIO noted: 
<blockquote>
 You can bet your bottom stablecoin: Wall Street is lobbying to be let into the stablecoin game.
</blockquote> 
<h2 id="the-bigger-picture-for-crypto-investors">The Bigger Picture For Crypto Investors</h2> 
The passage of stablecoin legislation could redefine the landscape of financial transactions. Institutions like JPMorgan might transition from crypto skeptics to proponents, integrating blockchain technologies into their operations. 
Hougan predicts that adopting crypto wallets, combined with the efficiency of blockchain-based payment systems, could soon become standard, driven by innovations such as Stripe’s “<a href="https://x.com/collision/status/1783559623511011535" target="_blank" rel="noopener nofollow">pay with stablecoins</a>” feature and Visa’s analytics on <a href="https://visaonchainanalytics.com/" target="_blank" rel="noopener nofollow">rising stablecoin usage</a>. 
While stablecoins do not offer appreciation potential, investors can find opportunities in the infrastructure supporting them. 
Hougan points to Layer 1 blockchains like Ethereum and Solana, which host substantial stablecoin volumes and many decentralized applications (DeFi). 
As the legislative environment becomes more favorable, these technologies are poised for significant growth, reflecting a broader acceptance and integration of crypto into mainstream finance. Hougan concluded: 
<blockquote>
 In other words: Crypto is poised to take another huge leap into the mainstream.
</blockquote> 
Meanwhile, the stablecoin market remains strong, with a capitalization of approximately $166 billion, according to <a href="https://defillama.com/hacks" target="_blank" rel="noopener nofollow">DeFIllama</a>. In contrast, the inflows and outflows in the spot Bitcoin ETF market have been<a href="https://bitcoinist.com/blackrock-spot-bitcoin-etf-inflows/" target="_blank" rel="noopener "> less substantial</a>, highlighting a shift in investor focus as of now. 
<blockquote class="twitter-tweet"> 
 Yesterday’s ETF flows by <a href="https://twitter.com/FarsideUK?ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">@FarsideUK</a> were negative once again, with $83.6 million of outflows.<a href="https://twitter.com/search?q=%24GBTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">$GBTC</a> had $82.4 million of outflows. Fidelity did $2.8 million of outflows, Bitwise $3.8 million. 
 Blackrock holding at 0 for 3rd day in a row. 
 Price dumped after hours because of DTC… <a href="https://t.co/ocUF6zUroH" target="_blank" rel="noopener nofollow">pic.twitter.com/ocUF6zUroH</a> 
 — WhalePanda (@WhalePanda) <a href="https://twitter.com/WhalePanda/status/1784072215782146052?ref_src=twsrc%5Etfw" target="_blank" rel="noopener nofollow">April 27, 2024</a>
</blockquote> 
Featured image from Unsplash, Chart from TradingView

New Era In Crypto? Stablecoin Legislation Could Eclipse Bitcoin ETF Impact – Bitwise CIO

Table of Contents

Bitcoinist

Other articles published on May 1, 2024

A16z Purchased $90 Million Worth of Optimism Tokens, OP Price Jumps 13.5%

The Fall in Bitcoin Continues: $ 58,000 Levels Reached, Here is the Latest Data

US Authorities Target Bitcoin Cash Proponent Roger Ver For $48 Million Tax Fraud

Aave Labs Prepares for Next-Gen V4 Release

Bitcoin ETFs Reduce Holdings While Blackrock Stalls Purchases

Exploring altcoins poised for a breakout: Near Protocol, Ripple, NuggetRush

Join our free newsletter for daily crypto updates!