After years of political neglect, the crypto industry is suddenly finding its footing in Washington, DC.
For a long time, many companies, disillusioned by the lack of clear policy, were even considering exiting the U.S. market, but the 2024 election season marked a dramatic turning point.
With Donald J. Trump emerging as the winner of the 2024 U.S. presidential election, the crypto sector is seeing new momentum.
Industry leaders like Coinbase’s co-founder and CEO, Brian Armstrong, who invested over $100 million backing pro-crypto candidates, are now being heard at the highest levels of power.
Earlier this week, Armstrong had a phone call with President-elect Trump, a clear sign that the crypto community is starting to gain significant influence in Washington.
It’s no secret that Donald Trump wasn’t always a fan of Bitcoin and other digital currencies.
Just three years ago, during his previous term as president, Donald Trump dismissed Bitcoin, calling it 'seems like a scam.'
However, this year, the former president has evolved into a vocal supporter of the crypto movement, which placed him in the good graces of the crypto community.
Armstrong and his company were major contributors to pro-crypto candidates, pouring nearly $50 million into the campaign season.
Source: X (@OpenSecretsDC)
In recent months, Trump has floated ideas such as creating a crypto advisory council and even establishing a strategic reserve for Bitcoin.
His inner circle now includes several crypto advocates, such as Elon Musk and Howard Lutnick, CEO of Cantor Fitzgerald.
Lutnick, whose firm manages the reserves of the stablecoin giant Tether, was appointed on Tuesday to oversee the Commerce Department.
A source familiar with the call described the conversation between Trump and Armstrong as more general, focusing on the broader crypto landscape rather than specific appointments.
The Wall Street Journal had reported earlier that the two would meet.
Rumours on X also suggest that Brad Garlinghouse, CEO of Ripple, may have had direct talks with President-elect Trump.
Ripple, however, has remained tight-lipped about these claims, with a spokesperson stating that private discussions are not disclosed.
Trump's social media company, Trump Media and Technology Group, is reportedly in talks to acquire cryptocurrency exchange Bakkt in an all-stock deal valued at $155 million.
This move signals the company’s deeper dive into the crypto space, following its earlier launch of World Liberty Financial, a separate crypto venture.
Bakkt, founded by Kelly Loeffler, is majority-owned by Intercontinental Exchange (ICE), led by Jeffrey Sprecher, Loeffler’s husband.
This connection deepens Trump’s ties to Bakkt, as Sprecher is also involved in Trump’s broader political and business ventures.
Following the acquisition news, Bakkt's stock surged by 163%, while Trump Media’s shares rose by 16.7%.
With Trump’s growing involvement in the industry, some investors are hopeful the acquisition could lead to a stronger foothold in the competitive crypto market, despite concerns about Trump Media's profitability and long-term strategy.
For the crypto industry, the real point of concern now lies in upcoming appointments to key financial agencies.
One of the most significant is the selection of new leadership at the Securities and Exchange Commission (SEC), a body that has long been the subject of contention for the crypto world.
Under Chairman Gary Gensler, the SEC launched a series of high-profile lawsuits that many in the industry view as stifling growth and innovation.
The expectation is that Gensler will depart by the end of 2024, but the industry remains uncertain whether an immediate end to these legal battles will follow.
An interim chair of the SEC may be less likely to halt ongoing cases that do not relate to fraud.
In the latest development, Teresa Goody Guillén, a former SEC official and current blockchain expert at BakerHostetler, is being considered by President-elect Trump to lead the SEC.
Her experience with both crypto firms and traditional finance makes her a strong candidate for the role.
Meanwhile, the Commodities Futures Trading Commission (CFTC) could see its influence grow significantly, especially if proposed legislation shifts some regulatory powers over digital assets away from the SEC and to the CFTC.
Two names being closely watched for the CFTC leadership are Summer Mersinger, the current commissioner, and Josh Sterling, a lawyer from Milbank who has represented clients in crypto-related cases.
Both are seen as having a better understanding of the crypto industry and its needs.
Crypto leaders are taking bold steps to steer the future of the industry in this new era.
In a X livestream on 10 November 2024, Charles Hoskinson, founder of Cardano, expressed his openness to working with the incoming Trump administration to shape crypto policy.
He also mentioned having “personal friendships” with members of Trump’s team and shared optimism about advancing regulatory clarity under the new administration.
Another crucial role the crypto industry is closely monitoring is the position of the Treasury Department's Under Secretary for Terrorism and Financial Intelligence.
This position oversees regulations related to money laundering and illicit banking activities.
While not as directly involved in the day-to-day regulation of digital assets, the person appointed to this role could play a critical part in shaping the future regulatory framework for cryptocurrencies.
As the political landscape shifts, the crypto industry is ramping up its efforts to make its mark in Washington.
With key positions soon to be filled and a President-elect who’s more open to digital assets, the future of crypto in the U.S. is on the verge of a major transformation.
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