Crypto has long been the sleeping giant of the finance sector. Ridiculed by some and feared by others, its bull and bear market cycles have historically put curious institutional investors off the currencies – but no longer.
Next year, a tide of stability will sweep in, and Bitcoin will benefit, partly due to President-elect Donald Trump.
Donald Trump is known for his pro-crypto stance. He’s previously vowed to make the U.S. the “crypto capital of the planet ,” a strong signal his return to the White House will unleash digital currencies from their regulatory straitjacket.
If the market euphoria—BTC soared to a record high of $100,000 following Trump’s victory—is anything to go by, crypto will likely enjoy sunshine and rainbows during his term.
Of course, I recognize that words only mean so much, especially with Mr. Trump. However, in recent times, at least, it seems he’s sticking to his word.
Donald Trump’s Cabinet Picks
You only have to look at his cabinet picks, an early-stage indicator of the President-elect’s policies, to see that a more favorable regulatory environment is on the horizon.
For example, Trump’s pick as Treasury Secretary, Scott Bessent, previously argued that “crypto is about freedom and the crypto economy is here to stay.”
Similarly, Howard Lutnick, whose company Cantor Fitzgerald is reportedly in talks with Tether about a $2 billion Bitcoin lending project , will soon be the GOP’s Secretary of Commerce.
A Crypto Alliance
From the outset, Trump seems to be establishing a crypto alliance within his government, ramping up the likelihood that several cryptocurrencies will be given the regulatory greenlight institutional investors have been waiting for.
Gary Gensler, the current vilified chair of the SEC, recently announced that he will step down in January when presidential power transitions to Trump.
His departure marks a new dawn for crypto regulation. In his place, Trump has selected former SEC Commissioner Paul Atkins to take the top spot.
With Gensler out and Atkins in, the SEC’s progress in bringing crypto into the mainstream will accelerate—tenfold.
ETF Approvals
At the beginning of this year, the SEC approved eleven Bitcoin ETFs. These brought institutional investors closer to the assets and laid the foundation for bridging the gap between traditional and digital finance.
More good news came in May, as Ethereum ETFs were given approval. There has also been significant fanfare around the possible approval of Solana ETFs following discussions between the SEC and ETF issuers.
Digital currencies have gained widespread public approval for years, but the shifting attitudes of bodies and institutions will be key to attracting traditional investors and calming the market’s volatility.
We’ve already seen this in action as Nasdaq geared up to list options on Blackrock’s IBIT ETF in November, which has amassed a staggering $30 billion in assets since its launch.
Bitcoin Stability To Come
Bitcoin’s volatility has calmed somewhat as crypto assets have gradually become mainstream. Up to and before 2021, Bitcoin’s 30-day annualized volatility often jumped above 100% and even exceeded 150% in 2018 and 2020.
This year, though, the figure has stayed at the 80% mark or below. The storm is already subsiding.
This stability will only continue to sweep through the crypto market as more institutional investors come on board, the options market continues to expand, and volatility decreases.
No matter what you think about the incoming President, it’s clear a watershed moment of embrace is on the horizon for crypto. Under his four-year term, Bitcoin, in particular, will see a lot more uptake from the government, regulators, and investors alike, leaving its volatility in the history books.
2025 is the year Bitcoin’s bull/bear market cycles end. With greater government and institutional involvement and a reduced supply shock from the halving event, the market environment will cool and eventually become less volatile.
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