A new U.S. government has sparked a resurgence of hope for the crypto industry. After four years of regulatory uncertainty under the previous administration, which failed to provide clear guidance for the crypto industry, Donald Trump of all people seems to be addressing and reversing some of the restrictive measures implemented by the prior administration. Once a president who dismissed Bitcoin as “not money” and “based on thin air,” Trump has made a dramatic U-turn, entering his second term with a bold promise to transform the United States into “the crypto capital of the planet”.
In August 2023, the D.C Circuit Court of Appeals ruled that the SEC’s refusal to accept Grayscale’s application to list a spot Bitcoin ETF was “arbitrary and capricious”. In fact, it seems fair to say that the entire SEC acted arbitrarily and capriciously with its relationship to crypto. Its lack of clarity and consistency saw companies like Coinbase and Ripple slapped with subpoenas and lawsuits for listing unregulated securities, even though the SEC itself couldn’t even define which assets qualified as securities. This inability to set the rules of the road subsequently allowed FTX to operate with such little regulatory scrutiny, and everyone knows how that turned out…
Fast forward to 2025. The crypto industry has grown to a market cap equivalent to Apple at over $3.3 trillion. The launch of multiple BTC ETFs this time last year has brought in a staggering $40 billion, making it the most successful ETF launch in history. SEC Chairman Gary Gensler, who took on a regulation-by-enforcement approach, pressuring banks to cut ties with crypto-related services and stifling blockchain innovation, has resigned, and will likely be replaced by pro-crypto Paul Atkins. Hester Peirce, a far more vocal advocate of the crypto space, earning her the name “Crypto Mum”, has joined the SEC and will head the newly formed Crypto Task Force, designed to finally develop a clear regulatory framework for crypto assets.
Most importantly, this newly invigorated SEC has rescinded Staff Accounting Bulletin 121. Issued back in 2022, this guideline required companies that custodied digital assets on behalf of clients to recognise these assets as liabilities on their balance sheets, creating a compliance nightmare for banks who wanted to provide custody services for cryptocurrencies. Now that SAB 121 is repealed, banks and other financial institutions are free to offer crypto services to clients without listing the assets as liabilities, paving the way for cryptocurrencies to go mainstream across the U.S. financial system.
But financial institutions aren’t the only ones benefitting from change. Going under the radar amidst a new Trump regime, a recent update to the FASB guideline now allows companies who hold crypto on their balance sheets to be valued at market price, rather than at their purchase price, which required writing down losses during price drops without the ability to reflect gains when prices recovered. This change not only provides more accurate financial reporting but I believe it will significantly broaden the adoption of cryptocurrencies by U.S. businesses.
The biggest news of them all is undoubtedly Trump’s launch of his memecoin, since news headlines like to remind readers that crypto is about degenerate gambling, not financial innovation. But with all its controversy, this new stance on crypto could see some major changes culturally, not just financially. A memecoin launched by the President, and First Lady, might inspire others to create their own community tokens – potentially tied to sports teams, clothing brands, or celebrities – driving value within culture.
It’s not all shining lights though. The much-anticipated Strategic Bitcoin Reserve first proposed by Cynthia Lummis in July 2024 that suggested the U.S Treasury acquire 1 million bitcoins over a 5-year period doesn’t seem to be a priority just yet. Instead, the executive order signed by Trump included the evaluation of creating a “national digital asset stockpile”.
While slightly disappointed by the lack of any direct mention of Bitcoin, it also worryingly suggests that 1) there will be no purchase of Bitcoin, instead holding what was already seized, and 2) the mention of the word “stockpile”, indicating the potential inclusion of other cryptocurrencies. This would dilute Bitcoin’s unique position as the most decentralised, secure and scarce digital asset, undermining its role as the ultimate store of value. That said, I do expect Bitcoin to play a major role in this U.S. administration, which could force other G20 nations to rethink its strategic importance as a safeguard for security and store of wealth in times of aggressive money printing and debasing fiat currencies.
Overall, a Trump presidency appears to have laid the foundation for a progressive era for cryptocurrencies. I expect a growing recognition in the distinction between Bitcoin and crypto, increased adoption by U.S. banks and businesses integrating crypto on their balance sheets, and a surge in retail activity, but I urge newcomers to approach cautiously, given the volatility as crypto evolves from a $3 trillion to a $10 trillion asset class.
