Analysts at JPMorgan Chase (JPM) anticipate important regulatory changes to cryptocurrency markets in a second Trump time period, pushed by a Republican-controlled Congress and crypto-friendly insurance policies.
According to the funding financial institution, these changes might remodel the regulatory and market panorama.
Progress on pending laws
Key crypto-focused legislations, comparable to Financial Innovation and Technology Law for the twenty first Century (FIT21) and the Clarity for Payment Stablecoins Act of 2023might speed up, in line with JPMorgan.
These legal guidelines search to outline the roles of the SEC and the CFTC, set up regulatory frameworks for stablecoins and restrict government-backed digital currencies, prioritizing personal sector alternate options.
More collaborative regulatory setting
The financial institution means that the SEC might change one stance primarily based on strict legislation enforcement in the direction of a extra collaborative method. Lawsuits like the SEC’s case towards Coinbase (COIN) could possibly be softened or settled, decreasing obstacles for corporations like Robinhood (HOOD) and Uniswap.
Relaxation of banking restrictions
JPMorgan notes that reversing the SEC’s SAB 121, which limits banks’ participation in digital belongings, might encourage higher involvement of conventional establishments in cryptocurrency custody.
Leadership changes at the OCC and FDIC might additionally favor a extra open setting for banking interplay with digital belongings.
ETF approval
According to JPMorgan, optimism might enhance for spot ETFs, particularly for belongings like XRP (XRP) and Solana (SOL). However, authorized obstacles associated to the classification of those belongings as securities might delay their approval.
Increase in funding
Regulatory readability would enhance enterprise capital, preliminary public choices (IPOs) and mergers and acquisitions (M&A) exercise.
Initiatives like Wyoming’s DAO-friendly legal guidelines provide authorized frameworks that would foster innovation in the sector.
Low chance of a reserve fund in Bitcoin
Despite the BITCOIN Act proposal to determine Bitcoin (BTC) as a strategic reserve asset in the US, JPMorgan considers that this situation has low chance of success.
JPMorgan concludes that these changes might unlock a important development and higher legitimacy for crypto markets in the US, though they warn that some reforms might face delays or political resistance.
