Small Steps Forward: Why SEC Rules Only Crack Open a Few Doors for Wall Street

The SEC’s crypto regulations are often hailed as a major breakthrough—a moment when the door to digital assets would finally swing wide open into traditional finance. But when listening to Matt Hougan, Chief Investment Officer of Bitwise, the picture looks quite different.
In an interview with CryptoSlate, he puts it bluntly: Yes, the SEC’s new rules are a positive signal, especially for Bitcoin ETFs. But that’s where it ends. “It’s a step in the right direction,” Hougan says, “but we’re still at the beginning of a very long journey.”
And that journey is paved with small, unspectacular hurdles—not blocked by major political decisions, but by the daily operations of banks and fund managers. Wall Street is a vast, well-oiled machine built around compliance, risk management, and operational processes. And these systems aren’t designed to handle the volatility or technical quirks of cryptocurrencies.
“It’s not the regulators holding things back,” Hougan explains. “It’s the internal processes of the banks.” Until those processes adapt, crypto remains more of a theoretical option than a practical one for many inst



itutional investors.
Then there’s the skepticism within the industry itself. Hougan knows this firsthand: Many finance professionals—especially the older generation—want nothing to do with Bitcoin and its peers. “That’s changing slowly, but it’s a generational project.”
And even when attitudes shift, the infrastructure remains lacking. Traditional securities trade through secure custody solutions like DTCC—something crypto still lacks. “There’s no central entity that guarantees security and compliance,” Hougan says. That creates uncertainty and makes entry difficult for many.
Tax and accounting rules also pose major obstacles. “Accounting for crypto assets is complex and often doesn’t fit existing standards,” he explains. That translates to added costs, risks—and hesitation from companies considering entry.
Still, Hougan remains optimistic: “Progress won’t be linear, but it’s unstoppable.” Every small step—a new ETF, an improved custody solution, updated compliance software—matters. “Wall Street has a million doors,” he says. “And we’ve only cracked open a few.” The rest comes down to hard work—and patience.