Investing.com -- JPMorgan analysts anticipate significant shifts in crypto markets under a second Trump presidency, driven by a Republican-controlled Congress and expectations of crypto-friendly policies.
These changes could reshape the regulatory and market landscape, according to the investment bank.
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Pending Legislation Advances
Key crypto-focused legislation, such as the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Clarity for Payment Stablecoins Act of 2023, might be expedited, says JPMorgan. They explain that these bills aim to clarify the roles of the SEC and CFTC, establish stablecoin frameworks, and limit government-backed digital currencies in favor of private-sector alternatives. -
Collaborative Regulatory Environment
JPMorgan suggests the SEC may shift from enforcement-driven actions to a more collaborative approach. Lawsuits, such as the SEC’s case against Coinbase (NASDAQ:COIN), could be softened or resolved, potentially reducing barriers for firms like Robinhood (NASDAQ:HOOD) and Uniswap. -
Easing Banking Restrictions
They also note that reversing SEC's SAB 121, which limits banks’ ability to engage with digital assets, could foster greater traditional bank involvement in crypto custody. Leadership changes at the OCC and FDIC could also encourage banks to interact more with digital assets. -
ETF Approvals
JPMorgan believes the market may see optimism for spot ETFs, particularly for XRP and Solana. However, legal hurdles around these assets’ classification as securities could delay their approval. -
Increased Investment
Clearer regulations could spur venture capital, IPOs, and M&A activity, according to the bank, noting that initiatives like Wyoming’s DAO-friendly laws offer frameworks that could encourage further innovation. -
Low Chance of a Bitcoin Reserve
While the BITCOIN Act proposes establishing Bitcoin as a U.S. strategic reserve asset, JPMorgan sees this as a low-probability event.
JPMorgan concludes that these changes could unlock growth and legitimacy for crypto markets in the U.S., though they note that some reforms may face delays or political resistance.