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.
Global Landscape Update – Entering the Golden Era of Bitcoin and Crypto Assets
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, which 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 begin to close the gap, but as of now, MiCA is significantly ahead in providing legal certainty for crypto assets in Europe, potentially driving institutional adoption across the continent.
The ECB has also just announced 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 significantly boost Ethereum’s on-chain activity.
It looks like bitcoin and other cryptocurrency assets are entering the mainstream.
That said, policies from the new Trump administration have contributed little to create certainty in financial markets. In fact, U.S. economic policy uncertainty has surged to levels not seen since the COVID-19 recession in 2020 due to escalating trade tensions and government-related job cuts.
U.S. recession fears are resurfacing. According to crypto-oriented betting platform Polymarket, the probability of a U.S. recession in 2025 has already reached 41%. The latest Fed of Atlanta forecast also predicts Q1 2025 GDP growth numbers to be at -1.8% quarter-over-quarter.
U.S. job cut announcements in February have also spiked to the highest level since the Covid recession.
While this economic climate has weighed on risky assets globally, including cryptocurrencies, the data is also creating a positive environment 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 typically thrives in weak dollar conditions accompanied by accelerating global money supply growth.
There’s also a growing chance that crypto assets could decouple from traditional financial markets due to idiosyncratic factors like the delayed effects from the bitcoin halving and continued supply shortages on exchanges. Ongoing inflows into U.S. spot bitcoin ETFs and continuous purchases by companies worldwide should continue to contribute to this pervasive supply deficit. These factors are likely to create a tailwind for crypto assets in the coming months, regardless of the macro economic environment.
In conclusion, renewed prospects for a decisive turnaround in monetary policy amid global growth concerns, combined with persistent supply scarcity, could drive the next wave of adoption and elevate crypto assets into the mainstream. It appears that the golden era for bitcoin and crypto assets is just beginning.
Ask an Expert
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 signifies a change in approach, rather than a move towards lax protection against fraud and theft. Consumer protection, market integrity, and cybersecurity remain crucial enforcement areas. Companies should prioritize transparency and fair dealing to align with expectations. Additionally, as seen with memecoins, plaintiffs’ class action attorneys and state regulators are expected to fill gaps in federal oversight. Market volatility will also heighten the need for strong operational resilience to handle these 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 distinguishes itself from MiCA in its approach to stablecoin regulation, particularly in its focus on global adoption and the influence of the U.S. dollar. While MiCA emphasizes protection for euro-backed stablecoins within the EU, it imposes restrictions on non-euro stablecoins in certain contexts. Conversely, the GENIUS Act, as proposed, aims to encourage international use of USD-backed stablecoins, fortifying the dollar’s role in global payments.
For firms active in both markets, the Act’s reciprocity clauses could facilitate smoother cross-border transactions and regulatory alignment with U.S. frameworks, potentially expanding the accessibility of dollar-denominated digital assets.
