Late 2024 marks a significant shift in the approach to cryptocurrencies from Republican lawmakers in the U.S. At a policy event in Washington, Senator Tim Scott, the newly appointed chair of the Senate Banking Committee, and Representative French Hill, chair of the House Financial Services Committee, expressed optimism about moving toward legislation, particularly with the Financial Innovation and Technology for the 21st Century Act (FIT21), which has bipartisan support. They aim to promote a collaborative effort between Congress and the upcoming Trump administration to establish comprehensive guidelines for the cryptocurrency market.
Senator Scott has emphasized a positive view on digital assets, proposing the establishment of a subcommittee on digital assets. In contrast, Senator Elizabeth Warren, who will play a prominent role in the committee, is expected to criticize crypto-related initiatives. Both lawmakers have acknowledged the importance of achieving bipartisan consensus to pass the necessary legislation, with Hill's prediction that notable measures could emerge by 2025.
Additionally, representatives from the U.S. Securities and Exchange Commission (SEC) discussed the future of regulation, with calls for collaboration with the Commodity Futures Trading Commission (CFTC) to ensure effective regulation. The expectation for a more proactive approach to anti-fraud enforcement was highlighted, indicating potential changes in market oversight.
Bloomberg's senior ETF analyst, Eric Balchunas, predicts a "wave" of new cryptocurrency exchange-traded funds (ETFs) by 2025, starting with a fund that combines Bitcoin and Ether. He noted that while cryptocurrency ETFs are expected to launch gradually, funds tracking Litecoin and Hedera may be deployed soon thereafter. The SEC's recent rejection of Solana ETFs suggests that XRP and SOL ETFs may not be considered until a new SEC chair is appointed, likely under the leadership of Donald Trump, who has a favorable stance towards cryptocurrencies.
Analysts believe that Litecoin may have a greater potential for approval due to its classification as a commodity, while Hedera is likely to be approved because it has not been labeled as a security by the SEC. Despite the optimistic outlook for blockchain funds, demand from investors remains a question mark. Expected changes from the SEC may alter the regulatory attitude towards cryptocurrencies, ushering in a new era for the industry.
