In the year 2025, the cryptocurrency market is anticipated to demonstrate a constructive yet turbulent trajectory.
With President Trump's inauguration on January 20th, discussions about how his second term might impact the crypto sector and emerging tech industries, like AI, have dominated business headlines. Following the "crypto ball" organized by David Sacks and Trump's label as the "first crypto President," expectations are sky-high for proactive actions.
As the Trump team settles into their roles, confirmation hearings continue, and regulatory changes take place, several expected executive orders have surfaced, including:
- Addressing Operation Chokepoint 2.0.
- Repealing SAB 121, enabling banking institutions to hold crypto with less complexity.
- Establishing a strategic bitcoin reserve using U.S.-seized bitcoin.
These potential actions have garnered significant attention in U.S. policy circles, even leading to a bipartisan Congress vote to repeal SAB 121.
However, despite the positive momentum and market sentiment, 2025 could be more volatile than some anticipate. Here's why:
Executive Orders vs. Congress
After the election, expectations for sweeping crypto-related changes through executive orders have escalated. While pro-crypto actions are crucial for the crypto lobby, numerous broader issues and powerful lobbyists require the administration's attention. Furthermore, executive orders may not escape scrutiny and challenges from Congress and the courts.
Agency Pivots Might Disappoint
Gary Gensler's departure from the SEC is seen positively by the crypto sector, as he was perceived as a pro-crypto regulator. However, the pace of pro-crypto regulations remains uncertain. Additionally, the IRS, despite a new administration, might maintain its pursuit of tax revenues from crypto transactions, potentially disappointing investors and policy advocates.
Crypto Might Not Be a Priority
Crypto might not receive immediate attention from the new administration despite the flurry of actions at the beginning of the term. Geopolitical and economic complexities might push crypto issues to the backburner.
In conclusion, while 2025 marks a positive year for crypto, unexpected challenges and limitations might make the journey more challenging than initially anticipated.
Insight:
One significant anticipated move is the establishment of a Cryptocurrency Advisory Council, aiming to provide regulatory clarity and support. In addition, the Trump administration may be expected to reverse SEC accounting guidance (SAB 121) and address bank regulators' efforts to restrict crypto companies' access to traditional financial services (Operation Chokepoint 2.0).
- To further boost the crypto sector, it has been suggested that the Trump administration consider establishing a digital asset division within the Treasury Department, responsible for overseeing and promoting the use of digital assets in the economy.
- As discussions about crypto regulations continue, some experts predict that the new administration may focus on enhancing digital asset security and protecting consumer interests by implementing stricter digital asset authentication protocols and fostering transparency in digital asset transactions.
