Matt Hougan, Chief Investment Officer, Bitwise

Original translation: Luffy, Foresight News

Last week, SEC Chairman Paul Atkins delivered a speech titled " American Leadership in the Digital Financial Revolution " at the American Policy Institute.

You should read it now. Seriously, don't hesitate, this speech is your investment roadmap for the next five years.

In his speech, Atkins outlined his vision for the future of financial markets. Spoiler alert: it will all revolve around public blockchains like Ethereum. He proposed:

• All assets (stocks, bonds, US dollars, etc.) will eventually be migrated to the public chain;
• Decentralized finance (DeFi) will play a major role in the future;
• Crypto assets and blockchain can enable exciting new business models;
• The main factor holding back this “revolution” was the hostile regulatory environment, which has now undergone a 180-degree shift.

This is the most complete vision I’ve ever read of how cryptocurrencies will reshape financial markets.

After reading this speech, it's hard not to want to allocate significant capital to crypto. If you work in finance, you might even consider shifting your career focus there. The SEC chairman condensed into this single speech all the best arguments raised by cryptocurrency advocates over the past decade and detailed how the SEC will implement these ideas.

“This is a once-in-a-generation opportunity,” he wrote in his speech. A few years ago, I’m not even sure the compliance department would have let me say that.

What it means for investors

For investors, there's so much to learn from this speech. You could build an entire venture capital firm around Atkins' vision and build companies for each of the opportunities he outlined. But three investment opportunities stand out to me.

Opportunity 1: Ethereum (and other Layer 1 public chains)

The most obvious opportunity is to invest in Ethereum and other Layer 1 public chains that support stablecoins and asset tokenization.

“Today, I’m announcing the launch of Project Crypto,” Atkins said. “This is a Commission-wide initiative to update securities regulations to enable the migration of U.S. financial markets to blockchain.”

It’s not hard to see that if almost all assets are going to migrate to public chains, you’ll definitely want to invest in these public chains.

Which public chains are worth watching? The best strategy might be to buy a basket of mainstream assets: Ethereum, Solana, Cardano, XRP, Avalanche, Aptos, Sui, NEAR, etc.

I know some readers will say that Ethereum is clearly the dominant blockchain for tokenization and stablecoins. I agree! It's in the lead. But looking back to the rise of digital trading in the early 2000s—the last major upgrade to the financial system—the early market leaders were companies like Island ECN and Instinet.

Have you heard of these names lately? Me neither. But Nasdaq's stock price has risen 2,275% since its IPO in July 2002.

Instead of trying to pick individual targets, it is better to adopt an indexing strategy and buy a basket of assets to cover future top projects.

Opportunity 2: “Super Apps” like Coinbase and Robinhood

The most instructive section of the speech was titled “Driving Super Apps: Horizontal Integration of Products and Services,” in which Atkins envisioned a future where a single app could offer customers a full range of financial services.

Atkins stated: “Brokers and dealers with alternative trading systems should be able to offer trading in non-security crypto assets, crypto-asset securities, traditional securities, as well as crypto staking, lending, and other services without having to obtain licenses in more than 50 states or multiple federal charters.”

It’s hard not to think of this when reading this: both Coinbase and Robinhood are pursuing the super app concept, albeit from different starting points: Coinbase started in crypto and is expanding into traditional assets, while Robinhood started in traditional assets and is rapidly moving into crypto.

I'd venture a prediction: One of these companies could become the largest financial services company in the world, perhaps even the first to reach $1 trillion in market capitalization. Atkins has just laid out the roadmap for them.

Opportunity 3: DeFi Applications

The third opportunity that stood out in Atkins’ speech was decentralized finance (DeFi).

DeFi applications have always existed in a regulatory gray area, neither permitted nor explicitly prohibited by existing laws. This has limited their development: while DeFi applications are widely used by crypto enthusiasts, they have rarely been used by mainstream investors and institutions.

In a segment titled “Unleashing the Potential of the US Market: A Vast and Complete On-Chain Software System,” Atkins explains why regulators have difficulty understanding DeFi:

“Decentralized financial software systems, such as automated market makers, enable automated, disintermediated financial market activity. Federal securities laws have always assumed the existence of regulated intermediaries, but this does not mean we should impose intermediaries when markets can operate without them.”

In other words: DeFi is not only a technological revolution, but also a conceptual revolution. And the SEC chairman understands this.

Despite the lack of regulatory clarity, DeFi applications have seen significant growth. Uniswap, the largest spot trading application, saw record-breaking trading volume of $88 billion in June. DeFi lending protocols like Aave also saw record-breaking locked-in value of $56 billion. Derivatives platforms like Hyperliquid are also prolific.

If regulations are clearer, could these numbers increase 10x? 50x? Or 100x? As traditional and crypto markets merge, the opportunities in DeFi will be enormous.

Critics point out that most DeFi tokens lack a clear economic connection to the underlying protocols. For example, Uniswap’s UNI token is a “governance token”: meaning holders can vote on the direction of the protocol but don’t benefit from the trading fees collected by the platform.

I suspect this is a relic of the past hostile regulatory environment. Under the SEC’s new vision, assets like UNI could potentially establish a more direct economic connection with the underlying protocol, unlocking significant value.

Core question: Has it been priced in?

The most obvious question about Atkins’s vision is: Is it already priced in? If the market had anticipated the SEC’s shift from being a crypto naysayer to a catalyst, then the prices of assets like Ethereum, Solana, and Uniswap should already reflect this.

Maybe. But let me conclude by saying this: This speech caught me off guard.

I've been researching and writing about cryptocurrencies for the past eight years and am a long-term bullish believer in their future. I've even said that all assets will eventually migrate to the blockchain. But after reading this speech, I realized I wasn't thinking big enough and needed to move faster.

If I didn't expect it, I guess no one else did either.