In today’s crypto for advisers, André Dragosch of Bitwise Europe gives an update on the global crypto regulatory landscape and suggests that we may enter a golden age for crypto.
Then Beth Haddock from Warburton’s advisers answers questions about the effect of legislative clarity in the crypto market in ASK an expert.
– Sarah Morton
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Global Landscape Update – Entering the Golden Era of Bitcoin and Crypto assets
Much has changed over the past six months. Donald Trump joined the United States on January 20, which was already two months ago. Nevertheless, the new administration in this relatively short period has introduced a broad set of positive regulatory changes in the United States, including:
- Executive Order On Digital Financial Technology
- Establishing a strategic Bitcoin reserve and the national digital active stock
- Formation of SEC’s Crypto Task Force
- Progress of the genius law
- Change in SEC’s enforcement strategy
The executive order to create a strategic Bitcoin reserve has already established the United States as the largest superb owner of Bitcoins in the world, with significantly more purchases is expected.
On the other side of the pond, the EU entered “Markets in Crypto Assets” (MICA) regulation into effect at the end of 2024 and should also bring more legislative clarity to Europe and harmonize crypto regulation across the continent.
It seems that Mica is at least three to five years ahead of us crypto regulation with regard to clarity, consistency and implementation. If the United States adopts extensive crypto regulation for the next few years, it could begin to close the gap, but right now Mica is markedly ahead of providing legal certainty for crypto assets in Europe, which can be an important driver for institutional adoption across the continent.
The ECB has also just revealed that it will introduce the digital euro CBDC in October this year, far ahead of the plan. The digital euro is joined to use public blockchains as Ethereum, which could potentially increase Ethereum’s activity on chain significantly.
It seems that Bitcoin and other crypto assets come into mainstream.
That said, the policies of the new Trump administration have done little to create security in the financial markets. In fact, uncertainty about economic policy has risen to the highest level since the Covid-19 recession in 2020 due to rising merchant stresses and state-related job cuts.
US recession fears are back on the table. According to Crypto-Based Betting Website Polymarket, the probability of a US recession in 2025 has already risen to 41%. The latest Fed of Atlanta forecast also estimates that the latest GDP growth numbers for Q1 2025 must be at -1.8% quarter over the quarter.
US job cutting messages in February have also spiked to the highest level since the Covid Recession.
While all this has certainly weighed on risky assets globally, including Bitcoin and Crypto assets, the data also creates a positive background through renewed dollar weakness and rising fat rate cut expectations.
Global money supply, which is already close to new heights all the time, is accelerating again, which is bodied well for scarce crypto assets like Bitcoin. Bitcoin generally tends to thrive in weak dollar environments where the global money supply growth accelerates.
There is also a growing likelihood that crypto assets can disconnect from traditional financial markets in view of idiosyncratic factors such as the delayed effect of the Bitcoin half and the ongoing supply deficit on exchanges. Structural influxes for us spot Bitcoin ETFs and continued purchases from companies around the world should continue to contribute to this radical supply deficit. These factors are likely to continue to give a wind to crypto assets in the coming months, regardless of the macro environment.
In any case, the renewed prospects of a decisive reversal of monetary policy in the midst of global growth worries combined with pervasive supply button could drive the next wave of adoption and catapult crypto assets into mainstream.
It seems that the golden era of Bitcoin and Crypto assets is just getting started.
AndAndré Dragosch, Head of Research – Europe, Bitvis
Ask an expert
Q: With the change in SEC leadership, companies should expect a favorable legislative environment, or are there new risks they need to prepare for?
ONE: SEC’s shift away from regulation for enforcing and forming the crypto-task forced signalizes a change in approach rather than a step to slap protection against fraud and theft. Consumer protection, market integrity and cyber security remain the main enforcement areas. Businesses should focus on transparency and fair trade to adapt to expectations. As we have seen with Memecoins, the plaintiff class action attorneys and state regulators are likely to fill gaps in federal supervision. Market volatility also increases the need for strong operational resilience to withstand these risks.
Question: How is the genius compared with other global legislative frameworks such as MICA, and what does it mean for companies operating in both the US and Europe?
ONE: Genius Act differs from Mica in its approach to stableecoin regulation, especially in its emphasis on global adoption and the US dollar influence. While MICA prioritizes protection for euro-stacked stablecoins within the EU, it imposes restrictions on non-euro-stablecoins in certain use cases. In contrast, the ingenious action, as proposed, will encourage the international use of USD-supported stablecoins, which strengthens the role of the dollar in global payments.
For companies operating in both markets, the reciprocity regulations of the law can facilitate smoother cross-border transactions and regulatory adaptation to US frameworks, potentially expanding the range of dollar-denominated digital assets.
-Beth Haddock, CEO partner and founder, Warburton Advisers
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