Emily Walker
With President-elect Donald Trump getting ready for his upcoming term, changes in the cryptocurrency regulatory framework are anticipated. The approval of several crypto ETFs is expected within the next year, potentially ushering in significant advancements for digital currencies in the U.S.
New Players in the Crypto ETF Market
Bloomberg ETF analyst Eric Balchunas has indicated that Bitcoin and Ethereum ETFs from companies like Hasdex, Franklin Templeton, and Bitwise Invest are prime candidates for upcoming approvals.
He also highlighted recent setbacks with Solana filings, suggesting that both Solana and XRP ETFs will have to wait for the new U.S. Securities and Exchange Commission (SEC) leadership to evaluate their proposals effectively.
However, Balchunas mentioned that the approval process may face obstacles. He pointed out that there are “complex legal issues” regarding the classification of these tokens, specifically their designation as “securities.”
On the other hand, Litecoin, which is considered a derivative of Bitcoin, might be classified as a commodity by the SEC, potentially increasing its approval chances. Currently, only Canary Capital is pursuing a Litecoin or HBAR ETF filing.
While Balchunas is optimistic about the likelihood of approval for both assets, he cautioned that investor interest in these products remains uncertain.
Trump’s Shift in Regulation
The expected increase in crypto ETF approvals coincides with Trump’s overall shift towards a favorable regulatory climate for digital assets. On December 4, he nominated Paul Atkins as the possible new chair of the SEC, indicating his aim to create a supportive atmosphere for cryptocurrency.
This shift follows the resignation of current SEC chair Gary Gensler, whose departure is set for January 20, the same day Trump will be inaugurated.
Atkins previously served as an SEC Commissioner from 2002 to 2008 under President George W. Bush and is known for advocating for reduced regulatory restrictions on financial markets.
Trump has expressed his trust in Atkins, asserting on Truth Social that he is a “proven leader for common sense regulations.” The President-elect has emphasized Atkins’s understanding of capital markets’ potential and the vital role of digital assets in promoting economic development.
As the incoming administration prepares to take office, attention is also focused on who will lead the Commodity Futures Trading Commission (CFTC).
Sources have informed Fox Business that the new Trump administration may designate the CFTC to oversee regulation of specific crypto assets, which will further influence the framework for digital currency regulations in the U.S.
Overall, these anticipated developments are seen as highly positive for the cryptocurrency sector. The impending regulatory changes and a more accommodating environment are expected to encourage increased institutional adoption.
Image credit: DALL-E, chart source: TradingView.com