2025... Regulatory Framework and Arms Race
A pro-crypto regulatory shift, coupled with the creation of a strategic reserve for Bitcoin, is expected to help the crypto market rebound in 2025. After the market turmoil of 2022, investors are still looking for a comprehensive regulatory framework that promotes stability. The shift in the role of the Securities and Exchange Commission to the Commodity Futures Trading Commission (CFTC) could add to the market’s clarity.
In the final months of the US presidential campaign, there has been a surprising amount of discussion about cryptocurrencies emerging as a new national strategic priority. In this context, some cryptocurrency advocates have suggested that a “Bitcoin arms race” could emerge, in which sovereign governments around the world might begin making massive purchases. In the US, this buying race would likely begin by creating a strategic reserve that would allow it to buy 1 million bitcoins over the next five years. Other countries would likely be forced to follow suit. This possibility has raised the intriguing question of whether China might be forced to reverse its ban on cryptocurrencies since late 2021. If China decides to dive into the Bitcoin market and starts accumulating them as it has been doing with its gold reserves, the market could see an unprecedented surge in price. Brazil and Russia are also currently considering using Bitcoin as a strategic reserve, reflecting the growing role that cryptocurrencies are playing in the global economy.
