JPMorgan Analysts Outline How Trump's Administration Could Reshape U.S. Crypto Landscape Amid Market Surge

In the wake of a record-breaking rally that saw Bitcoin soaring to $93,500, JPMorgan analysts, led by Nikolaos Panigirtzoglou, highlighted six transformative shifts that could redefine the U.S. cryptocurrency ecosystem under Donald Trump and a Republican-led Congress.

1. Fast-Tracking Pending Crypto Legislation

Key bills, including the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Clarity for Payment Stablecoins Act of 2023, could gain momentum. FIT21 would clarify oversight roles between the SEC and CFTC, while the Stablecoins Act aims to exclude payment stablecoins from being classified as securities. Meanwhile, the CBDC Anti-Surveillance State Act might halt central bank digital currency (CBDC) development, paving the way for private stablecoins to flourish.

2. Collaborative Regulatory Shift

The SEC’s aggressive enforcement approach may pivot toward cooperation, potentially settling or dropping high-profile lawsuits against firms like Coinbase. Regulatory actions against companies such as Robinhood and Uniswap could also ease, reducing litigation risks.

3. Banking Sector's Increased Role in Crypto Custody

JPMorgan predicts the repeal of SAB 121, a rule that restricts banks from holding crypto assets. This move, along with leadership changes at the FDIC and OCC, could encourage banks to freely engage with digital assets. While optimism grows for spot ETFs involving XRP, Solana, and others, the SEC might demand additional resolutions around unregistered securities and futures-based ETFs before approving them.

4. Crypto Venture Capital and M&A on the Rise

Regulatory clarity is expected to unlock more venture capital funding, mergers, acquisitions, and IPOs in the crypto space. Collaboration on initiatives like tokenization and DAOs could flourish, with Wyoming’s DAO law serving as a model for innovation.

5. Low Odds for U.S. Bitcoin Reserve Adoption

The proposed BITCOIN Act—which seeks to classify Bitcoin as a strategic reserve asset akin to gold—faces slim chances of approval. Despite its potential to drive $90 billion in inflows, JPMorgan analysts see this as an unlikely development.

6. Interest in Multi-Token ETFs

Demand for multi-token ETFs is growing, but low interest in spot Ether ETFs compared to Bitcoin ETFs could delay broader ETF approvals, analysts noted.

These developments signal significant potential for growth, tempered by regulatory and market complexities. If implemented, these shifts could position the U.S. as a global leader in the evolving cryptocurrency economy.