Why governments are embracing Bitcoin instead of fighting it

Cryptocurrency has come a long way from being perceived as a fringe technology to becoming a central discussion in policy and finance.

Roundtable anchor, Rob Nelson, recently hosted Matt Hougan, Chief Investment Officer at Bitwise, to discuss crypto's evolution, its relationship with governments, and the breakthroughs that have shaped Hougan’s perspective after years in the industry.

Reflecting on his experience, Matt Hougan shared, "I always had in the back of my mind this existential risk for things like bitcoin... how governments would see bitcoin, particularly as anything but a threat to their monetary policy." He admitted initial concerns that governments might react negatively, potentially banning crypto outright. However, over the past year, Hougan has been struck by how "Crypto has found a way to sort of co-opt governments into being pro crypto as a formal policy."

Nelson shared his insights from a conversation with David Bailey, head of Bitcoin Magazine. Recalling Bailey’s recent interaction with former President Donald Trump , Nelson explained, "Trump loves the dollar, and the first thing he asked was, 'Is this going to hurt the dollar?'" Bailey's response, paraphrased, was compelling: "If it does, wouldn’t you rather we have it than China?" This pragmatic framing appeared to resonate, highlighting the strategic importance of leading in crypto adoption.

Hougan echoed this sentiment, emphasizing that his early skepticism about governments embracing crypto has been replaced by optimism. "That was the mental leap I couldn’t make when I first joined, and it is just laid out now in front of you," he said. "It’s really amazing to see."

The conversation also touched on the exponential potential of crypto assets. Hougan noted, "It’s very hard to think about an asset 10Xing or 50Xing, but the more I study products like bitcoin and even ethereum, you can start to see how you can potentially get that kind of exponential growth."

As Hougan concluded, the transformation of crypto from a perceived existential threat to a recognized asset class with government buy-in marks a pivotal shift. "It’s the last wall to fall... and it’s crumbled over the last 12 months," he observed. The integration of crypto into formal policy frameworks signifies a promising path forward for the industry.