- Trump’s Bitcoin reserve could legitimize crypto, attracting institutional investment.
- Regulatory clarity from Trump could provide much-needed transparency for crypto firms.
- Fed’s interest rate decisions in 2025 could impact crypto market growth or volatility.
The year 2025 begins with all eyes on President-elect Donald Trump’s first 100 days in office; start January 20. The crowd favorite during the campaign with his pro-crypto stance, Trump’s policies going forward could impact Bitcoin and the broader cryptocurrency market for the long haul.
Investors anticipate that early regulatory decisions and strategic moves from the administration will determine whether the current bullish momentum continues or faces obstacles.
Bitcoin Reserve: A Bold New Proposal
Among Trump’s most discussed campaign promises was the establishment of a U.S. Bitcoin reserve. While details remain sparse, the initiative has sparked debate across the industry.
If enacted, this policy could position Bitcoin as a government-backed asset, attracting institutional investors and fostering global credibility for the cryptocurrency. However, it will require robust political support and regulatory frameworks to become a reality.
Regulatory Reforms: Crypto’s Long-Awaited Clarity
The lack of clear regulatory guidelines has long plagued the crypto sector. Under the prior SEC leadership, enforcement actions against major platforms like Coinbase caused widespread market uncertainty.
Trump’s administration has pledged to address this by simplifying the classification of digital assets and creating transparent rules. Such reforms could stabilize the market and encourage innovation, benefiting both businesses and investors.
Read also: Crypto Braces for Trump’s Impact on M&A and Bitcoin’s $100K Rally
Impact of Accounting Rules and Interest Rates
Other factors shaping crypto’s trajectory in 2025 include accounting regulations and monetary policy. Current rules, such as SAB 121, require banks to list custody assets as liabilities, complicating institutional involvement in crypto.
Additionally, the Federal Reserve’s monetary stance is under scrutiny. Fewer interest rate cuts in 2025 could influence risk assets like Bitcoin, driving market sentiment and volatility. A balanced approach from the Fed could help sustain crypto’s growth.
The rule mandates that public companies recognize the crypto they custody as liabilities on their balance sheets, which has led to operational difficulties. It remains to be seen whether the Trump administration will address this issue to ease the burden on banks and improve their ability to support crypto assets.
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