Bitcoin has seen a remarkable recovery, rising to $94,000 following reports that Donald Trump plans to introduce pro-cryptocurrency executive orders on his first day in office. These expected orders aim to tackle significant regulatory issues within the crypto industry, particularly the contentious SEC Staff Accounting Bulletin 121 (SAB 121).
Impact of SAB 121
This bulletin requires companies holding cryptocurrencies for clients to classify these assets as liabilities on their balance sheets. As a result, it has increased the costs and risks associated with crypto custody for banks. The incoming administration’s intention to reform crypto regulations could potentially mitigate the impact of SAB 121, which has been criticized for hindering banking services for crypto firms.
An SEC Commissioner has previously pointed out the selective application of SAB 121, which seems to favor a limited number of major banks while disadvantaging others. The anticipated changes are likely to prompt a positive reaction from the crypto market, as stakeholders hope for a more balanced regulatory approach.
Market Recovery
In response to the news of Trump’s potential executive orders, the crypto market has begun to recover from earlier declines. Bitcoin, which had dropped to $89,000—its lowest level in two months—quickly rebounded to $94,500. Ethereum followed suit, recovering from a dip below $3,000 to approximately $3,100.
- The altcoin AAVE, linked to Trump-backed World Liberty Financial, experienced a notable 5% increase shortly after the announcement.
- This resurgence indicates a broader optimism in the market as investors look forward to a more favorable regulatory environment.
Broader Implications
The implications of Trump’s executive orders extend beyond Bitcoin and Ethereum. These orders may improve banking access for cryptocurrency businesses, addressing what industry leaders have described as “de-banking” practices. A Vice Chair of the FDIC has criticized previous banking restrictions on crypto firms and has called for clearer guidelines to support the industry.
Furthermore, Trump’s team is reportedly considering restructuring the FDIC and merging banking regulators to enhance operational efficiency. This could lead to a more streamlined regulatory framework for the crypto sector, fostering an environment conducive to growth and innovation.
Anticipated Changes in U.S. Crypto Policy
As Trump prepares for his inauguration, the crypto community anticipates significant changes in U.S. crypto policy. A new Crypto Czar is set to be appointed, and a crypto-friendly former regulator is expected to lead the SEC. These appointments suggest a potential shift in regulatory attitudes towards cryptocurrencies.
This shift could create a more supportive environment for innovation and investment in the sector. Major crypto firms have made substantial contributions to Trump’s inauguration events, potentially providing them with early access to discussions about future crypto policies.
A Transformative Period Ahead
The expected changes in crypto regulation under Trump’s administration are likely to represent a turning point for the industry, which has been navigating a complex and often challenging regulatory environment. As the market continues to recover from recent volatility, the prospect of a more favorable regulatory framework is expected to attract new investors.
Moreover, this enhanced confidence among existing stakeholders could pave the way for a transformative period in U.S. cryptocurrency policy, with significant implications for the future of digital assets. The developments surrounding Trump’s inauguration could lead to collaborative efforts to shape a regulatory landscape that promotes growth and stability.
📎 Related coverage from: beincrypto.com
