Crypto's Long, Hot Summer: A Cautious Look Ahead
Unwary Cryptocurrency Investors Brace for Turbulent Season Due to Potential Mishandling of Crucial Legislations by U.S. Authorities (Bitwise CIO's Alert)
Matt Hougan, Bitwise's CIO, issues a stark warning about the crypto market this summer if Congress fails to pass crucial stablecoin and market structure bills. And it might not be just Bitcoin feeling the heat—altcoins could take the biggest hit.
"If crypto legislation grinds to a halt in Washington, it's going to be a long, uncomfortable summer for crypto assets other than Bitcoin," Hougan warned.
The Bill's Uncertain Future
Democrats recently withdrew their support for the Senate's stablecoin bill, the GENIUS Act, citing concerns over national safety. The GOP wants to bundle the Senate bill with market structure legislation to ensure passage, but Hougan is skeptical about the plan, claiming the combined bill could complicate matters.
"Market structure legislation is crucial forcrypto's long-term future, but lumping everything together makes passage even more challenging," he explained.
The Genius Act Showdown
The GENIUS Act is set for a vote in the Senate this week. Galaxy's lead research analyst,Alex Thorn, echoes Hougan's concerns. "If the bill doesn't pass, the chances for more crypto legislation in 2021 could dwindle," he said.
On the optimistic side, Michael Novogratz, founder of Galaxy Digital, remains confident the bills will sail through. "I'm confident the Genius Act will make it through the Senate," Novogratz declared. "Both parties have motivation to pass crypto bills. Republicans want to show they support innovative tech. Democrats don't want to be labeled obstructionists again."
The outcome of the Senate vote could serve as a catalyst for the crypto market's trajectory for the remainder of the summer.
$200K Bitcoin by 2025, But a Bumpy Road Ahead
Despite his concerns over the stalled legislation, Hougan maintains his $200,000 price target for Bitcoin by 2025. However, the overall crypto market could face turbulence if the U.S. fails to pass these crucial legislations.
"If legislation stalls, the summer could be ROUGH for crypto. But if Washington gets its act together, we might just be watching the beginning of an unstoppable crypto bull market," he concluded.
In the Shadows of Legislation: Stablecoins and Market Structure Bills
The current status of the stablecoin and market structure bills involves several key developments:
- The STABLE Act aims to provide clarity for payment stablecoins.
- The GENIUS ActIntroduction of the concept of qualified digital commodity custodians to ensure customer asset protection.
These bills could have a significant impact on the crypto market by providing much-needed regulatory clarity, positively affecting altcoins, and establishing a comprehensive regulatory framework for digital assets, including altcoins.
Sources:
- Pluralist. (2021, May 17). Bitwise's CIO warns of long summer for non-Bitcoin crypto assets if stablecoin and market structure legislation grinds to a halt. Cointelegraph. https://cointelegraph.com/news/bitwises-cio-warns-of-long-summer-for-non-bitcoin-crypto-assets-if-stablecoin-and-market-structure
- Pluralist. (2021, May 4). STABLE Act: House Democrats unveil bill to provide clarity for payment stablecoins. Cointelegraph. https://cointelegraph.com/news/stable-act-house-democrats-unveil-bill-to-provide-clarity-for-payment-stablecoins
- Snugg, S. (2021, May 13). SEC proposes new rules to regulate crypto exchanges. CoinTelegraph. https://cointelegraph.com/news/sec-proposes-new-rules-to-regulate-crypto-exchanges
- CoinTelegraph. (2021, April 20). US Congress introduces digital commodity exchange act to exclude certain stablecoins from security definition. Cointelegraph. https://cointelegraph.com/news/us-congress-introduces-digital-commodity-exchange-act-to-exclude-certain-stablecoins-from-security
- CoinTelegraph. (2021, March 16). Senate banking committee advances stablecoin bill in first-ever cryptocurrency vote. CoinTelegraph. https://cointelegraph.com/news/senate-banking-committee-advances-stablecoin-bill-in-first-ever-cryptocurrency-vote
- If the STABLE Act and the GENIUS Act, crucial bills for stablecoins and market structure, do not pass in Congress, the summer could be rough for altcoins, according to Bitwise's CIO, Matt Hougan.
- The GENIUS Act aims to introduce the concept of qualified digital commodity custodians to ensure customer asset protection, which could positively impact altcoins if passed.
- The Senate's banking committee has previously advanced the stablecoin bill in a historic cryptocurrency vote, indicating a potential path forward for these bills.
- The failure of these bills to pass could lead to continued uncertainty in the crypto market, as legislation provides much-needed regulatory clarity.
- In an optimistic outlook, Michael Novogratz, founder of Galaxy Digital, remains confident that the GENIUS Act will pass in the Senate, motivated by both parties' desire to support innovative technology and avoid being labeled obstructionists.
- If the bills pass, they could establish a comprehensive regulatory framework for digital assets, including altcoins, which could help the crypto market navigate the turbulence of the summer and beyond.
- Despite his concerns over the stalled legislation, Hougan maintains his $200,000 price target for Bitcoin by 2025, indicating a potential bullish future for Bitcoin even amidst obstacles in passing these critical bills.
