Cryptocurrencies are entering 2025 with a new wave of momentum, fueled by the election of Donald Trump as U.S. president. Bitcoin, the flagship cryptocurrency, surged past the $100,000 mark in November, marking a historic milestone and sparking predictions of a sustained bull market.
Unlike past cycles, this rally is underpinned by significant political backing. For the first time, the U.S. has a president who openly champions cryptocurrency, complete with promises of establishing a “strategic national Bitcoin stockpile.” Trump has also begun placing crypto advocates in key government positions, signaling a shift toward policies that may dramatically reshape the financial landscape.
This evolution was years in the making. During crypto’s downturn, industry leaders focused on political influence, pouring over $130 million into the 2024 election cycle. Their efforts included a robust public relations campaign promoting “crypto voters” as an influential bloc and amplifying claims of government hostility toward crypto startups.
“The crypto industry is built on a foundation of regulatory noncompliance,” noted Hilary Allen, a law professor at American University and author of Driverless Finance.
Despite its meteoric rise, the industry has faced numerous scandals, including fraud and instability, as seen during the 2022 crash. This downturn wiped out retail investors and major firms but remained largely insulated from traditional financial systems. Analysts warn that under the new administration, the firewall separating crypto from conventional finance could crumble, heightening systemic risks.
Trump’s administration is poised to weaken oversight further. Paul Atkins, a crypto-friendly nominee for the Securities and Exchange Commission (SEC), is expected to curb enforcement actions. Moreover, efforts to move regulatory authority from the SEC to the smaller and less-experienced Commodity Futures Trading Commission (CFTC) are gaining traction, raising concerns about effective oversight.
Elon Musk, a vocal crypto supporter, has also called for the elimination of the Consumer Financial Protection Bureau, arguing it unfairly targets cryptocurrency firms. Such moves could erode consumer protections, paving the way for greater integration of crypto into traditional finance—a goal at odds with crypto’s anti-establishment origins.
Meanwhile, the industry’s lobbying mirrors tactics once employed by disgraced FTX founder Sam Bankman-Fried, who spent millions influencing lawmakers. His efforts ultimately aimed to reduce oversight, contributing to FTX’s collapse and leaving millions without access to funds.
While industry leaders promise a brighter future, critics warn that the risks remain unchanged. As crypto becomes increasingly intertwined with the broader financial system, another downturn could have far-reaching consequences, potentially jeopardizing pensions, savings, and even the global economy.
With crypto’s supporters now in the corridors of power, the question looms: will the industry’s unchecked growth lead to a new financial frontier or a collapse too big to contain?
