In today’s crypto for advisors, André Dragosch from Bitwise Europe provides an update on the global crypto regulatory landscape and suggests we may be entering a golden age for crypto.
Then, Beth Haddock from Warburton Advisers answers questions about the impact of regulatory clarity on the crypto market in Ask an Expert.
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Much has changed over the past six months. Donald Trump took office in the U.S. on January 20, which was already two months ago.Nonetheless, in this relatively short period of time, the new administration has introduced a broad set of positive regulatory changes in the U.S., including:
- Executive Order on digital financial technology
- Establishment of a Strategic Bitcoin Reserve and national digital asset stockpile
- Formation of the SEC’s Crypto Task Force
- Advancement of the GENIUS Act
- Shift in the SEC’s enforcement strategy
The Executive Order to create a Strategic Bitcoin Reserve has already established the U.S. as the single biggest sovereign holder of bitcoins in the world, with significantly more purchases expected.
On the other side of the pond, the EU “Markets in Crypto Assets” (MiCA) regulation came into force at the end of 2024, and should also bring more regulatory clarity to Europe and harmonize crypto regulation across the continent.
It appears as if MiCA is at least three to five years ahead of U.S. crypto regulation in terms of clarity, consistency and implementation. If the U.S. passes comprehensive crypto regulation in the next few years, it could start closing the gap, but as of now, MiCA is significantly ahead in providing legal certainty for crypto assets in Europe, which could be a major driver for institutional adoption across the continent.
The ECB has also just revealed that it will introduce the digital euro CBDC in October of this year, way ahead of schedule. The digital euro is rumored to utilize public blockchains like Ethereum, which could potentially boost Ethereum’s on-chain activity significantly.
It looks like bitcoin and other crypto assets are entering the mainstream.
That being said, the policies of the new Trump administration have done little to create certainty in financial markets. In fact, US economic policy uncertainty has increased to the highest level since the COVID-19 recession in 2020 due to increasing trade tensions and government-related job cuts.
U.S. recession fears are back on the table. According to crypto-based betting website Polymarket, the probability of a US recession in 2025 has already increased to 41%. The latest Fed of Atlanta forecast also estimates the latest GDP growth numbers for Q1 2025 to be at -1.8% quarter-over-quarter.
U.S. job cut announcements in February have spiked to the highest level since the Covid recession as well.
While all this has certainly weighed on risky assets globally, including bitcoin and crypto assets, the data is also creating a positive backdrop via renewed dollar weakness and increasing Fed rate cut expectations.
Global money supply, already close to new all-time highs, is accelerating again, which bodes well for scarce crypto assets like bitcoin. Bitcoin generally tends to thrive in weak dollar environments where global money supply growth is accelerating.
There is also increasing probability that crypto assets could decouple from traditional financial markets given idiosyncratic factors like the lagged effect from the bitcoin halving and the ongoing supply deficit on exchanges. Structural inflows into U.S. spot bitcoin ETFs and continued purchases by corporations worldwide should continue to contribute to this pervasive supply deficit. These factors will most likely continue to provide a tailwind for crypto assets over the coming months, irrespective of the macro environment.
In any case, the renewed prospects for a decisive turnaround in monetary policy amid global growth worries, coupled with pervasive supply scarcity, could drive the next wave of adoption and catapult crypto assets into the mainstream.
It looks as if the golden era of bitcoin and crypto assets is just getting started.
–André Dragosch, head of research — Europe, Bitwise
Q: With the shift in SEC leadership, should companies expect a favorable regulatory environment, or are there new risks they need to prepare for?
A: The SEC’s shift away from regulation-by-enforcement and the formation of the Crypto Task Force signal a change in approach, rather than a move to lax protection against fraud and theft. Consumer protection, market integrity and cybersecurity remain key enforcement areas. Companies should focus on transparency and fair dealing to align with expectations. Additionally, as we’ve seen with memecoins, plaintiff class action attorneys and state regulators are likely to fill gaps in federal oversight. Market volatility will also increase the need for strong operational resilience to withstand those risks.
Q. How does the GENIUS Act compare to other global regulatory frameworks like MiCA, and what does this mean for companies operating in both the U.S. and Europe?
A: The GENIUS Act differs from MiCA in its approach to stablecoin regulation, particularly in its emphasis on global adoption and U.S. dollar influence. While MiCA prioritizes protection for euro-backed stablecoins within the EU, it imposes restrictions on non-euro stablecoins in certain use cases. In contrast, the GENIUS Act, as proposed, will encourage the international use of USD-backed stablecoins, reinforcing the dollar’s role in global payments.
For companies operating in both markets, the Act’s reciprocity provisions could facilitate smoother cross-border transactions and regulatory alignment with U.S. frameworks, potentially expanding the reach of dollar-denominated digital assets.
–Beth Haddock, managing partner and founder, Warburton Advisers
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- SEC Commissioner Hester Peirce shares her views on her agency’s digital asset task force.
