Harvard Economist Slams US for Failing on Sensible Crypto Regulation

US crypto regulation gets failing grade from Ivy League heavyweight.

Policy Paralysis

Harvard's top economist just shredded Washington's approach to digital assets—calling it reactive, fragmented, and downright counterproductive. While other nations build frameworks, America's regulators keep playing whack-a-mole with enforcement actions.

Innovation Exodus

Startups aren't waiting around. They're incorporating offshore, launching products elsewhere, and leaving US investors holding bags of regulatory uncertainty. The talent drain is real—and accelerating.

Wall Street's Silent Win

Meanwhile, traditional finance quietly stacks Bitcoin ETFs—the ultimate 'if you can't beat 'em, buy the ETF' move. They'll profit from the volatility they publicly decry. Classic finance.

Wake-up call or obituary? Either way, the clock's ticking.

Harvard Economist and Bitwise CIO Clash on Bitcoin Fundamentals

Kenneth Rogoff, Professor of Economics at Harvard University and former Chief Economist at the IMF, admitted he miscalculated Bitcoin’s trajectory nearly a decade ago.

He predicted the pioneer crypto would more likely crash to $100 than ever trade at $100,000.

“What did I miss? I was far too optimistic about the US coming to its senses about sensible cryptocurrency regulation; why would policymakers want to facilitate tax evasion and illegal activities?” Rogoff wrote in a recent post.

The Harvard economist also conceded to not appreciating how bitcoin would compete with fiat currencies.

Given the blatant conflict of interest, he also failed to anticipate a situation where regulators could brazenly hold crypto seemingly without consequence.

These remarks highlight frustration at Washington’s slow and conflicted regulatory stance.

Matt Hougan, CIO at Bitwise Asset Management, criticized Rogoff’s framing. In his view, Rogoff overlooked Bitcoin’s greatest advantage, decentralization.

According to the Bitwise executive, the pioneer crypto draws power from people, not centralized institutions.

You missed: Failed to imagine that a decentralized project, which drew power from people and not centralized institutions, could succeed at scale. https://t.co/HLidOOKXUu

For Hougan and other Bitcoin advocates, the crypto’s resilience is proof that decentralized systems can thrive where traditional economic models WOULD have assumed failure.

Ironically, while Rogoff remains skeptical, his own institution has quietly taken a major step into crypto markets. Two weeks ago, Harvard University disclosed a $116.6 million investment in BlackRock’s Bitcoin ETF (IBIT), its fifth-largest single position, even surpassing Alphabet.

With IBIT as Harvard’s only Web3 investment, it suggests the symbolic weight of the move.

For a university whose top economist questioned Bitcoin’s role, the investment reflects the growing disconnect between theoretical skepticism and financial reality.

Fed Vice Chair Bowman Calls for Balanced Rules

Meanwhile, as crypto regulation in the US comes into question, Federal Reserve Vice Chair for Supervision Michelle W. Bowman struck a forward-looking note at the 2025 Wyoming Blockchain Symposium.

Bowman said blockchain technology represented a “seismic shift” in finance comparable to industrialization or the internet. Based on this, she urged regulators to balance caution with innovation.

“Our approach should consider allowing Federal Reserve staff to hold de minimus amounts of crypto or other types of digital assets so they can achieve a working understanding of the underlying functionality,” Bowman said.

Her call for practical engagement by regulators, even suggesting personal exposure to digital assets, signaled a willingness to rethink outdated approaches and avoid regulatory inertia.

The exchange between Rogoff and Hougan, combined with Bowman’s regulatory stance and Harvard’s allocation, captures the contradictions of crypto’s growth.

While policymakers continue to wrestle with risks, economists warn of systemic distortions. Yet, both Wall Street and elite institutions are moving deeper into Bitcoin exposure.

Bitcoin’s resilience seems to validate Hougan’s point that decentralization has proven stronger than expected.

The real test, however, may be whether regulators, academics, and institutions can agree on rules that shape the next chapter of digital finance, rather than stifling it.