As Donald Trump gears up for his second term, a fresh regulatory outlook for cryptocurrencies is taking shape. Big changes are expected, including the likely approval of a series of crypto ETFs, marking an important era for digital assets in the U.S.
New Players in Crypto ETFs
Eric Balchunas, an ETF specialist at Bloomberg, suggests that Bitcoin and Ethereum ETFs from companies like Hasdex, Franklin Templeton, and Bitwise Invest are the next in line for approval. However, he points out that recent rejections of Solana-related filings imply Solana and XRP ETFs will probably have to wait for consideration until there’s a change at the helm of the SEC with the new administration.
The road to approval isn’t expected to be smooth. Balchunas emphasizes that "complex legal issues" regarding whether these tokens should be classified as securities must be addressed. On the flip side, Litecoin, considered a Bitcoin offshoot, could be recognized as a commodity by the SEC, which might increase its chances of getting a green light for ETF status. Only Canary Capital has filed for a Litecoin or HBAR ETF thus far.
While Balchunas feels optimistic about their chances, he cautions that it’s yet to be seen if these products will attract enough interest from investors.
Trump’s Regulatory Changes
The anticipated influx of crypto ETF approvals aligns with Trump’s broader regulatory strategy for digital assets. On December 4, Trump confirmed his intention to appoint Paul Atkins as the potential head of the SEC, highlighting his commitment to create a crypto-friendly climate.
This transition follows the resignation of current SEC chair Gary Gensler, whose tenure will conclude on the same day as Trump’s inauguration on January 20. Atkins, who served as an SEC Commissioner between 2002 and 2008 under President George W. Bush, is known for advocating reduced regulatory burdens on financial markets.
Trump has expressed his confidence in Atkins, sharing on Truth Social that Atkins is a “proven leader for common sense regulations.” Trump believes that Atkins recognizes the value of capital markets and the role digital assets can play in spurring economic growth.
As the new administration prepares to step in, there is increasing focus on the Commodity Futures Trading Commission (CFTC) and the selection of its new leader. According to Fox Business sources, Trump’s incoming team might give the CFTC the authority to regulate specific crypto assets, which could further influence the regulatory direction for cryptocurrencies in the U.S.
All these changes are seen as a boon for the crypto industry at large. With expected regulatory shifts and a more encouraging environment, there is a strong sense of optimism that we will see a surge in institutional adoption.
The daily chart reveals the total crypto market capitalization valued at $3.55 trillion. Source: TOTAL on TradingView.com
