As President-elect Donald Trump prepares to assume office for his second term, significant changes in the regulatory landscape for cryptocurrencies are on the horizon. A wave of crypto ETFs is expected to gain approval in the coming year, signaling a potentially transformative shift for digital assets in the United States.
Emerging Entrants In Crypto ETFs
According to to Bloomberg ETF expert Eric Balchunas, dual Bitcoin and Ethereum ETFs from firms such as Hasdex, Franklin Templeton, and Bitwise Invest are likely to be the next candidates for approval.
Balchunas also noted recent rejections of Solana filings, indicating that both Solana and XRP ETFs will need to wait until the new administration in the US Securities and Exchange Commission (SEC) takes control for their applications to be “seriously considered.”
However, the path to approval may not be straightforward. Balchunas pointed out that “complex legal issues” surrounding the classification of these tokens, particularly regarding their status as “securities,” will need to be resolved.
In contrast, Litecoin, viewed as a fork of Bitcoin, may be categorized by the SEC as a commodity, which could enhance its chances of approval. Notably, new issuer Canary Capital is the sole filer for a Litecoin or HBAR ETF.
While Balchunas believes both have relatively higher odds of approval, he cautions that it remains unclear whether there will be sufficient investor demand for these products.
Trump's Regulatory Shift
This anticipated surge in crypto ETF approvals aligns with Trump's broader regulatory shift toward digital assets. On December 4, Trump confirmed Paul Atkins as the potential new SEC chair, a move that reinforces his commitment to fostering a crypto-friendly environment.
This change comes in the wake of the resignation of current Securities and Exchange Commission chair Gary Gensler, whose last day in office coincides with Trump's inauguration on January 20.
Atkins, who served as an SEC Commissioner from 2002 to 2008 under President George W. Bush has a reputation for advocating less regulatory burden on financial markets.
Trump expressed confidence in Atkins, stating in a Truth Social post that he is a “proven leader for common sense regulations.” The President-elect emphasized Atkins's belief in the potential of capital markets and the importance of digital assets in driving economic growth.
As the new administration prepares to take office, attention is now turning to the Commodity Futures Trading Commission (CFTC) and who will lead that agency.
Sources have indicated to Fox Business that the incoming Trump administration may empower the CFTC to regulate certain crypto assets, further shaping the future of digital currency regulation in the US.
Yet, all these developments are viewed as significantly positive for the broader cryptocurrency industry. The anticipated regulatory changes and a more supportive environment are expected to foster greater institutional adoption.
Featured image from DALL-E, chart from TradingView.com
