Matt Hougan, chief investment officer at Bitwise Asset Management, which claims to have created the world’s first cryptocurrency index fund, argued on Wednesday that “positive” regulation for the industry could start the next bull market.
Hougan made the comment on “Varney & Co.” as bitcoin climbed back above $30,000 on Wednesday, following the most popular cryptocurrency’s drop below that mark on Tuesday for the first time in a month.
As of Wednesday afternoon, bitcoin was trading at around $32,140, an increase of nearly 8 % from the day before, according to Coindesk.
Bitcoin had reached a record $64,000 earlier this year.
Bitcoin and other cryptocurrencies remain unregulated within the U.S. financial system. The euphoria surrounding cryptocurrencies at the start of the year has been impacted by increased talk of regulation around the globe, which has weighed on bitcoin’s price.
Hougan told host Stuart Varney that he believes a renewed interest in cryptocurrencies will “happen naturally.”
|BITW||BITWISE 10 CRYPTO INDEX FD UNIT BENEFICIAL INT||34||+3.78||+12.51%|
He said that currently “we are going through a pause” as it pertains to the crypto market and offered some perspective.
“The Bitwise Index is still up 250% over the last 12 months,” Hougan told Varney. “It’s up more over the last 12 months than the S&P 500 is over the past eight years.”
He argued that the “pause is driven by some uncertainty on how regulations are going to develop over the next three to six months.”
Hougan added that “if the regulators in D.C. get it right, I think positive regulation could start the next major wave of a crypto bull market.”
CRYPTO NEEDS REGULATION, BUT IT DOESN’T NEED NEW RULES
U.S. Sen. Elizabeth Warren, D-Mass., had called for oversight of the cryptocurrency market in order to protect consumers from scams coming from the growing interest in the digital currencies.
Warren chaired a Senate Banking subcommittee hearing last month looking at issues with cryptocurrencies as well as whether the U.S. Federal Reserve should issue its own digital currency.
Warren referred to cryptocurrency markets as the “Wild West” during an interview on Bloomberg TV.
The senator didn’t suggest new regulations, but said that some financial market protections aren’t available for cryptocurrencies.
Also, last month police in China arrested more than 1,000 people suspected of using cryptocurrencies to launder illegal proceeds from telephone and Internet scams, Reuters reported.
The Ministry of Public Security said the arrests came as authorities in China stepped up their crackdown on cryptocurrency trading.
Cryptocurrencies have already become a popular means of payment in illegal gambling activities, according to Reuters.
Hougan argued that “a lot of education” on the cryptocurrency market is needed for politicians, regulators and the public. He stressed that “crypto today is not like the crypto it was in 2013.”
Hougan went on to say that he is “confident” that the U.S. could reach “positive regulation” because the cryptocurrency space is one of the “fastest-growing” of the American and global economies.
“There is huge venture capital and huge talent moving into this space and I don’t think regulators want to force that offshore,” he continued.
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In Europe on Tuesday, European Union policymakers proposed another way to tighten regulation, according to Reuters, which noted that it would involve companies that transfer Bitcoin or other crypto assets to collect details of senders and recipients to help authorities crack down on dirty money.
The law proposed by the European Commission would make crypto transactions traceable. The rule already applies to wire transfers.
EU states and the European Parliament have the final say on the proposals, meaning it could take two years for them to become law.
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FOX Business’ Ken Martin contributed to this report.
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