According to Hougan’s claim, the biggest reason why the financial consultancy industry, which has a value of $20 trillion, is reluctant to invest in crypto is that the regulations are not clear. It is thought that if US regulators resolve the legal uncertainties regarding cryptocurrencies, this sector could direct trillions of dollars of investment to the crypto market.

According to Hougan’s statement in a Bitwise post dated June 4, the main reason why investments in crypto have not increased at the level expected from financial advisors in the last five years is regulatory uncertainty. This situation pushes investors to be cautious and prefer traditional investment instruments.

However, Hougan emphasizes that there are also positive developments regarding the cryptocurrency market in the USA. He states that the USA is finally on the path to clarity in regulations, and this can give confidence to the $20 trillion financial advisory industry in investing in crypto. Hougan predicts that investments will increase, saying, “We have seen the positive impact of a major asset manager like BlackRock entering the crypto market. Imagine if all of Wall Street accepted crypto as a normal part of the market.”

Hougan considers two important developments in May as a positive step. The first of these is the cancellation of a controversial regulation on the accounting of cryptocurrencies (Staff Accounting Bulletin 121) with the support of Democrats. Secondly, the House of Representatives adopted the Financial Innovation and Technology Act for the 21st Century (FIT21), which regulates the cryptocurrency market.

However, the cryptocurrency market still has obstacles to overcome. US President Joe Biden’s veto of the repeal of SAB 121 shows that regulations in the crypto market are still unclear. Hougan interprets this as a sign that “cryptocurrencies still have a long road ahead.”

However, Hougan remains optimistic. Although he admits that the integration of the crypto market with traditional finance will be a difficult journey, he thinks that this unity will bring significant gains in the long term. Hougan believes the crypto market offers untapped investment opportunities and that this “alpha” potential could attract traditional financial institutions.

While discussions about the future of the cryptocurrency market continue, Hougan emphasizes that investors and the crypto industry should closely follow the developments in Washington. Although it is unlikely that the FIT21 law will pass the Senate before the November elections, long-term regulation of the cryptocurrency market may create an environment of confidence for investors. As a result, the convergence of the cryptocurrency market and the traditional financial world offers significant opportunities for both investors and the crypto industry. However, in this process, clarification of regulations and maturation of the cryptocurrency market are critical.