Crypto Market Could Face Challenging Times This Summer - Bitwise
Bitwise chief investment officer Matt Hougan has warned that the crypto market could face headwinds this summer if the US Congress fails to pass bills that support the industry's development.
In his weekly investor update, he noted that his base case scenario sees many digital assets reaching all-time highs, with Bitcoin surpassing $200,000. However, he cited political decisions as the key risk factor.
The market has been rallying in early 2025 on expectations of looser regulation after Trump's election. In his first 100 days in office:
- a state bitcoin reserve has been created;
- digital assets are included in national priorities;
- The SEC has dropped almost all lawsuits against crypto exchanges and repealed the controversial SAB 121 standard;
- Pro-crypto commissioner Paul Atkins appointed as regulator's leader;
- anti-crypto initiative Choke Point 2.0 has been stopped;
- David Sachs has been appointed White House 'crypto czar'.
However, these measures remain vulnerable because they come from the executive branch and can be reversed by the next administration.
“The industry needs legislative support from Congress to be sustainable,” Hougan said, emphasizing the importance of passing at least one crypto bill to cement bipartisan cooperation.
The previously expected GENIUS Act, a bill to regulate stablecoins, was approved by the Senate Banking Committee in March but lost support from Democrats. Politicians attributed this to the document’s insufficient AML/KYC measures. According to Hougan, the real reason was the growing political tension surrounding Trump and related crypto initiatives. He expressed confidence that the GENIUS Act will eventually pass, as it paves the way for the integration of digital currencies into traditional finance.
The coming weeks will be crucial for the GENIUS Act. If the document does not gain support, the crypto market risks losing momentum, despite the positive actions of the White House.
