Bitcoin has experienced a remarkable surge, reaching record highs following President-elect Trump’s election victory, as the cryptocurrency sector anticipates huge changes in federal policy. This week, the price of a single bitcoin approached $100,000, having increased by over 40 percent since Trump’s reelection, who has vowed to be the most pro-crypto president and position the U.S. as the “crypto capital of the planet.”
Excitement among crypto investors is further heightened by the anticipated departure of Securities and Exchange Commission (SEC) Chair Gary Gensler, combined with Trump’s Cabinet selections. Investors believe these changes could signal a more favorable environment for the controversial industry.
Katherine Kirkpatrick Bos, general counsel for cryptography software company Starkware, stated that there is optimism regarding the new administration’s potential to encourage productive discussions with regulators. She noted that the past four years were marked by minimal effective engagement between the crypto industry and the SEC.
Coinbase’s Faryar Shirzad sees hope for innovation and regulatory clarity under Trump’s leadership
This optimistic sentiment has been reflected in the market almost immediately after Trump’s election, with Bitcoin jumping eight percent the day following the results. This rally continued until it hit a record high of over $98,700 last Friday.
Earlier this week, Bitcoin faced a slight decline, hovering around $90,000, along with a dip in other smaller cryptocurrencies. Nonetheless, analysts remain confident in the sustainability of this upward trend, with one describing the market as “structurally sound.”
Despite a history of skepticism toward digital currencies, Trump has assembled a Cabinet filled with pro-crypto advocates, which has bolstered confidence within the industry. Recently, Trump appointed billionaire investor Scott Bessent to lead the Treasury Department. Bessent, founder and CEO of the hedge fund Key Square Group, is recognized as a strong supporter of digital assets.
Brad Garlinghouse, CEO of crypto firm Ripple, referred to Bessent as the “perfect pick,” emphasizing that he will likely be the “most pro-innovation, pro-crypto Treasury Secretary we’ve ever seen.”
Amid discussions of a possible “crypto czar” to oversee cryptocurrency policy, enthusiasm within the crypto community has surged further. Reports suggest that Trump’s transition team is considering establishing a White House staff position specifically dedicated to cryptocurrency.
Faryar Shirzad, chief policy officer at cryptocurrency exchange Coinbase, expressed to The Hill that many in the industry have been striving to develop the next generation of the financial system and the internet in the U.S. He highlighted the challenges faced due to a lack of regulatory clarity and expressed optimism about the incoming administration’s understanding of technology’s potential.
Coinbase played a major role in enhancing the industry’s political engagement this election cycle, contributing $70.5 million to the Fairshake super PAC, according to Federal Election Commission data. As Trump’s Cabinet appointments progress, speculation grows regarding who will succeed Gensler as SEC chair, following the crypto industry’s contentious relationship with him and the previous administration’s critical stance toward digital currencies.
Possible candidates for the SEC chair include former acting Comptroller of the Currency Brian Brooks, former SEC Chair Paul Atkins, and former SEC general counsel Robert Stebbins, as reported by Axios.
Nathan McCauley, co-founder and CEO of Anchorage Digital, criticized the past four years as “regulation by enforcement,” expressing hope that the new administration will favor “regulation by rulemaking.” Many in the industry are advocating for a more defined regulatory framework that addresses the unique aspects of cryptocurrency and believe new leadership will drive this change.
Bos highlighted that several current regulations are misaligned with the realities of the crypto market. Shirzad added that the incoming SEC chair could greatly benefit the industry by signaling a willingness to provide the clarity that has been desperately sought. Federal lawmakers appear to align with Trump’s favorable stance toward cryptocurrencies. Last week, Sen. Cynthia Lummis (R-W.Y.) announced her intent to reintroduce the BITCOIN Act in the upcoming congressional session.
Originally introduced last summer without movement, the bill aims to establish a strategic bitcoin reserve, wherein the U.S. would acquire a substantial amount of the cryptocurrency for reserve purposes.
Lummis indicated to the Examiner that support for the initiative is “gaining momentum” as a means to address inflation and prevent further dollar devaluation. Trump has expressed openness to a crypto reserve and assured attendees at The Bitcoin Conference in July that the federal government intends to retain “100 percent” of its bitcoin holdings without selling any off.
It remains uncertain whether Lummis’s proposal will pass in the Senate, yet the industry remains hopeful, especially in light of recent leadership shifts. One known change is the departure of Senate Banking Committee Chair Sherrod Brown (D-Ohio), who lost reelection to Sen.-elect Bernie Moreno (R-Ohio).
Moreno has advocated for a pro-crypto stance, comparing sharply with Brown’s previous resistance to legislation aimed at clarifying federal regulation of cryptocurrencies.
Bitcoin hits historic highs with Trump’s promise to make the U.S. a crypto leader
Sen. Tim Scott (R-S.C.), regarded as a strong proponent of crypto, is expected to lead the Banking Committee, generating further enthusiasm. At a discussion with Lummis last August, Scott committed to establishing regulations that “promote innovation, protect consumers, and retain opportunities” in the U.S.
However, Scott may encounter opposition from Sen. Elizabeth Warren (D-Mass.), who is likely to become the ranking member of the Banking Committee and has consistently urged regulators to adopt a stricter approach to crypto trading. Interest in cryptocurrency appears to be gaining traction across party lines, reflecting a shift among lawmakers who were previously cautious following the collapse of FTX and its founder.
Chen Arad, co-founder of Solidius Labs, noted that many Democrats are now eager to engage with the topic, recognizing its importance to Americans as demonstrated by the elections. In 2022, Solidius Labs established the Crypto Market Integrity Coalition (CMIC), comprising 55 crypto institutions, including Coinbase and Robinhood.
The coalition has outlined its policy recommendations in a letter to Congressional leaders, proposing the creation of a national framework for stablecoins and a market structure bill to better delineate the differing authorities of the SEC and the Commodity Futures Trading Commission (CFTC).
Earlier this year, the House passed the Financial Innovation and Technology for the 21st Century Act (FIT 21), aimed at addressing these issues, but it was not considered by the Senate.
