Written by: Matt Hougan, Chief Investment Officer of Bitwise
Translated by: Luffy, Foresight News
Last week, SEC Chairman Paul Atkins delivered a speech titled (America's Leadership in the Digital Financial Revolution) at the American Priority Policy Institute.
You should read it right now. Really, don't hesitate, this speech is a roadmap for investment over the next five years.
In his speech, Atkins outlined a vision for the future financial market. Spoiler alert: everything will revolve around public chains like Ethereum. He proposed:
All assets (stocks, bonds, dollars, etc.) will ultimately migrate to public chains;
Decentralized Finance (DeFi) will play a significant role in the future;
Crypto assets and blockchain can give rise to exciting new business models;
The main factor hindering this 'revolution' has been the hostile regulatory environment, which has now turned 180 degrees.
This is the most complete vision I have read on how cryptocurrencies are reshaping financial markets.
After reading this speech, it's hard not to want to allocate a significant amount of funds to the crypto space. If you work in the financial industry, you might even consider shifting the focus of your career here. The SEC chairman has distilled all the essence of the viewpoints proposed by cryptocurrency supporters over the past decade into this speech, detailing how the SEC will facilitate the realization of these concepts.
"This is a once-in-a-generation opportunity," he wrote in his speech. A few years ago, I wasn't even sure the compliance department would allow me to say something like that.
What it means for investors
For investors, there are many insights worth digging into in this speech. You could start a venture capital firm around Atkins' vision, creating corresponding businesses for each opportunity he presents. But in my view, three investment opportunities stand out.
Opportunity 1: Ethereum (and other Layer 1 public chains)
The most obvious opportunity is investing in Ethereum and other Layer 1 public chains that support stablecoins and asset tokenization.
"Today, I announce the launch of Project Crypto," Atkins said, "This is a full committee initiative aimed at updating securities regulations to allow the American financial market to migrate on-chain."
It’s not hard to see: if almost all assets are going to migrate to public chains, you will certainly want to position yourself in those chains.
Which public chains are worth paying attention to? The best strategy might be to buy a basket of mainstream assets: Ethereum, Solana, Cardano, XRP, Avalanche, Aptos, Sui, NEAR, and so on.
I know some readers will say: Ethereum is clearly the dominant chain in the tokenization and stablecoin space. I agree! It is in a leading position. But looking back at the early 2000s when digital trading emerged—during the last major upgrade of the financial system—the early market leaders were companies like Island ECN and Instinet.
Heard these names recently? Neither have I. But the Nasdaq's stock price has risen 2275% since its listing in July 2002.
Instead of trying to pick individual targets, it’s better to take an indexed approach, buying a basket of assets to cover future leading projects.
Opportunity 2: 'Super Applications' like Coinbase and Robinhood
The most instructive part of the speech is titled 'Driving Super Applications: Horizontal Integration of Product Services'. In it, Atkins depicts a future where a single application can provide comprehensive financial services to clients.
Atkins stated: "Broker-dealers with alternative trading systems should be able to simultaneously offer trading in non-securities crypto assets, crypto asset securities, traditional securities, as well as services like crypto asset staking and lending, without needing to obtain licenses from over 50 states or multiple federal licenses."
Reading this section, it's hard not to think of Coinbase and Robinhood, both of which are practicing the super application concept, albeit starting from different points: Coinbase started in the crypto space and is expanding into traditional assets; while Robinhood began with traditional assets and is rapidly moving towards crypto.
I dare to predict: one of these companies may become the largest financial services company in the world, and may even be the first financial services company to surpass a market value of $1 trillion. Atkins has just pointed out the roadmap for them.
Opportunity 3: DeFi Applications
The third prominent opportunity in Atkins' speech is decentralized finance (DeFi).
DeFi applications have long been in a regulatory gray area, neither explicitly allowed nor clearly prohibited by existing regulations. This has limited their development: while DeFi applications are widely used by crypto enthusiasts, mainstream investors and institutions have hardly ventured in.
In the section titled 'Unlocking the Potential of the American Market: A Vast and Comprehensive On-Chain Software System', Atkins explains why regulators struggle to understand DeFi:
"Decentralized financial software systems (like automated market makers) facilitate automated, non-intermediated financial market activities. Federal securities law has always presupposed the need for regulated intermediaries, but that does not mean we should forcibly introduce intermediaries when the market can operate without them."
In other words: DeFi is not just a technological revolution, but also an ideological revolution. And the SEC chairman understands this.
Despite the lack of regulatory clarity, the usage of DeFi applications has been quite substantial. The largest spot trading application, Uniswap, reached a trading volume of $88 billion in June, setting a new historical high; DeFi lending protocols like Aave also saw their locked value refresh records, reaching $56 billion; platforms like Hyperliquid are similarly large in scale.
If regulation becomes clearer, could these numbers grow 10 times? 50 times? Or even 100 times? As the traditional market merges with the crypto market, the opportunities in the DeFi space will be vast.
Critics point out that most DeFi tokens lack a clear economic link to the underlying protocols. For example, Uniswap's UNI token is a 'governance token': it means holders can vote on the direction of the protocol's development but cannot benefit from the transaction fees collected by the platform.
I suspect this is a legacy issue from the past hostile regulatory environment. Under the SEC's new vision, assets like UNI may establish a more direct economic connection with the underlying protocols, unlocking tremendous value.
The core question: is it already priced in?
Regarding Atkins' vision, the most obvious question is: has this been priced in? If the market has already anticipated that the SEC will shift from being anti-crypto to a 'catalyst', then the prices of assets like Ethereum, Solana, and Uniswap should already reflect that.
Maybe. But what I want to say in the end is: this speech caught me off guard.
For the past eight years, I have been studying and writing about cryptocurrencies, and I have long been optimistic about their future. I have said that all assets will ultimately migrate onto the blockchain. But after reading this speech, I realized my perspective was not broad enough and that I needed to accelerate my pace of action.
If I didn't see it coming, I suspect others didn't either.
