Bitwise CIO: Gold price, US regulatory confusion are key crypto variables

Bitwise Chief Investment Officer (CIO) Matt Hougan has identified the surging price of gold and regulatory uncertainty in the U.S. as key factors driving the cryptocurrency market. He noted that about half of the value of gold, which has served as a form of currency for over two millennia, has been generated in the last 20 months, reflecting accumulated excess liquidity, debt, and currency devaluation. Hougan also pointed to a proposed crypto market structure bill, which he referred to as the Clarity Act, as a significant variable. He stated that while prediction markets gave the bill an 80% chance of passing earlier this month, that probability has dropped significantly after Coinbase criticized the current draft as ineffective. Hougan projected that if the bill ultimately fails, the crypto market could face a three-year period where it must directly prove its value. During this time, real-world use cases like stablecoins and tokenized stocks would be the main catalysts for changing the regulatory environment. However, he warned that if the bill fails and the adoption of these use cases also stalls, policy changes could pose a major threat to the crypto market.