Trump Era Will Unlock Crypto Market With Regulatory Clarity, Says Analyst

The 2024 U.S. elections didn't just reshape Washington—they reignited the cryptocurrency market, dominated by Bitcoin BTC/USD.

Since November, cryptocurrencies have rallied an impressive 65%, and according to JPMorgan analyst Kenneth B. Worthington, this surge is less about Bitcoin's volatility and more about the promise of regulatory clarity under the incoming Donald Trump administration.

From Chaos To Clarity

The industry's long cry for regulatory guardrails may finally be answered. Worthington points out that Trump's presidency brings a crypto-friendly tone to Washington, positioning the digital asset space for a more legitimate future. The president-elect's pro-crypto Congress and key appointments signal a new era where the focus shifts to defining market structures and clarifying which agencies—SEC or CFTC—will call the shots.

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Yet, don't expect fireworks just yet. While optimism runs high, actual regulatory reforms are at least 9-12 months away. From SEC and CFTC chair confirmations to rule-making processes, it's a marathon, not a sprint.

The most immediate impact?

FAQs and guidance provide the market with a quick dose of clarity, even as Congress wrestles with permanent legislation, the analyst said.

Who's Leading The Charge?

One major piece of the puzzle remains missing: the CFTC chair nomination.

This role will likely influence the regulation of Bitcoin and Ethereum ETH/USD, two pillars of the crypto world.

Meanwhile, the industry eagerly awaits to see how the SEC and FDIC might ease traditional finance's entry into crypto. Without some semblance of guidance, even the most pro-crypto stance won't move the needle for banks and brokers, according to Worthington.

A Glimpse Into The Future

What does a more transparent crypto ecosystem look like?

For starters, exchanges like Coinbase Global Inc COIN and Robinhood Markets Inc HOOD are already expanding their offerings, onboarding altcoins, and exploring auxiliary services like staking.

Traditional finance players like Charles Schwab Corp SCHW and BlackRock Inc. BLK are also eyeing their next moves, with the latter pushing for Bitcoin allocations in institutional portfolios, the analyst notes.

The bottom line?

Regulatory clarity could transform crypto from a speculative playground to a cornerstone of financial innovation. With the Trump administration setting a bullish tone, the crypto market might finally have the chance to break free from its regulatory limbo—and investors are paying attention.

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Image created using artificial intelligence via Midjourney.