Original Article Title: Project Crypto: Three Investments Poised To Benefit From the SEC‘s Shocking New Vision
Original Article Author: Matt Hougan, Chief Investment Officer at Bitwise
Article Translation: Luffy, Foresight News
Last week, SEC Chairman Paul Atkins delivered a speech titled "America's Leadership in the Digital Financial Revolution" at the American Priorities Policy Institute.
You should read it now. Seriously, don't hesitate, this speech can be considered a roadmap for investments over the next five years.
In the speech, Atkins outlined a vision for the future financial markets. Spoiler alert, everything will revolve around public blockchains like Ethereum. He proposed:
· All assets (stocks, bonds, USD, etc.) will ultimately migrate to public blockchains;
· Decentralized Finance (DeFi) will play a crucial role in the future;
· Crypto assets and blockchain can give rise to exciting new business models;
· The main obstacle hindering this "revolution" was a hostile regulatory environment, which has now made a 180-degree turnaround.
This is the most comprehensive vision I have read on how cryptocurrency is reshaping the 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 your career focus here. The SEC Chairman condensed all the key points that crypto supporters have put forward over the past decade into this speech, and also elaborated on how the SEC will push forward these ideas.
"This is a once-in-a-lifetime opportunity," he wrote in the speech. A few years ago, I wasn't even sure if the compliance department would allow me to say such things.
For investors, there is so much content in this speech worth delving into. You could start a venture capital firm around Atkins' vision and build corresponding businesses for each opportunity he presents. But in my view, three investment opportunities stand out.
The most obvious opportunity is to invest in Ethereum and other Layer 1 blockchains that support stablecoins and asset tokenization.
"Today, I am announcing the launch of 'Project Crypto,'" Atkins said, "This is a full-committee initiative aimed at updating securities regulations to enable the U.S. financial markets to migrate to the blockchain."
It's easy to see: if almost all assets are going to migrate to the public chain, you will certainly want to have positions in these blockchains.
Which blockchains are worth paying attention to? The best strategy may 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 obviously the dominant chain in tokenization and stablecoins. I agree! It is in the lead. But looking back at the rise of digital trading in the early 21st century—the last major upgrade of the financial system, the early market leaders were companies like Island ECN and Instinet.
Have you heard these names recently? Neither have I. But Nasdaq's stock price has risen 2275% since listing in July 2002.
Instead of trying to pick individual targets, it might be better to take an indexing strategy, buy a basket of assets to cover future top projects.
The most instructive part of the speech is titled "Driving Super Applications: Horizontal Integration of Product Services." In it, Atkins outlined a future where a single application can provide customers with comprehensive financial services.
Atkins stated, "Broker-dealers with alternative trading systems should be able to offer non-security crypto assets, crypto asset securities, traditional securities trading, as well as crypto asset staking, lending, and other services without needing licenses from over 50 states or multiple federal licenses."
Reading this part, it's hard not to think of Coinbase and Robinhood, both pursuing the super app concept, just starting from different points: Coinbase starting from the crypto field and expanding towards traditional assets; while Robinhood began with traditional assets and is rapidly moving towards the crypto space.
I boldly predict: one of these companies may become the world's largest financial services company, and may even become the first financial services company with a market value exceeding $1 trillion. Atkins has just provided them with a roadmap.
In Atkins' speech, the third highlighted opportunity is Decentralized Finance (DeFi).
DeFi applications have always existed 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 rarely ventured into this space.
In a section titled "Unleashing the U.S. Market Potential: A Robust and Comprehensive On-Chain Software System," Atkins explains why regulatory bodies struggle to understand DeFi:
"Decentralized financial software systems (such as automated market makers) enable automated, intermediary-free financial market activities. The federal securities laws have always assumed the need for regulated intermediaries, but this does not mean that in a market where operations can be conducted without intermediaries, we should forcefully introduce intermediaries."
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 decentralized exchange application, Uniswap, saw a trading volume of $880 billion in June, reaching an all-time high; the total value locked in DeFi lending protocols like Aave also hit a record high of $56 billion; derivative platforms like Hyperliquid have similarly large scales.
If regulatory clarity improves, could these numbers grow tenfold? Fiftyfold? Or a hundredfold? With the integration of traditional and crypto markets, the opportunities in the DeFi space will be vast.
Critics point out that most DeFi tokens and underlying protocols lack a clear economic connection. For example, the UNI token of Uniswap is a "governance token": meaning holders can vote on the protocol's development direction but cannot benefit from the platform's transaction fees.
My speculation is that this is a legacy issue from a previously hostile regulatory environment. Under the SEC's new vision, assets like UNI may establish a more direct economic link with the underlying protocol, unlocking significant value.
Regarding Atkins' vision, the most obvious question is: has this already been priced in? If the market has long anticipated the SEC's transformation from a crypto opponent to a "catalyst," then the prices of assets like Ethereum, Solana, Uniswap should already reflect this.
Perhaps. But what I ultimately want to say is: this speech caught me off guard.
For the past eight years, I have been researching and writing about cryptocurrency, with a long-term bullish view on the future of cryptocurrency. I have also said that all assets will eventually migrate to the blockchain. However, after reading this speech, I realized that my vision was not broad enough, and that I need to accelerate the pace of action.
If even I did not anticipate it, I think others may feel the same.
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