The price of Bitcoin surged to around $94,000 after news broke out that Donald Trump intends to sign supportive crypto executive orders on his inauguration day.
These orders might potentially reverse significant regulatory guidelines, such as the Securities and Exchange Commission’s Staff Accounting Bulletin 121 (SAB 121).
Trump is Reportedly Preparing to Overhaul Crypto Regulations Starting Day One
As per The Washington Post’s news, it is anticipated that these orders will tackle significant issues in the cryptocurrency sector, including banking limitations and the contentious SAB 121 matter.
According to this SEC advisory, businesses managing cryptocurrencies for their clients should list these digital assets as obligations (or liabilities) on their financial statements.
The SEC has been allowing exemptions to SAB 121 on a case-by-case basis for large banks, but not extensively enough. According to SEC Commissioner Hester Peirce, this approach was unsuccessful as it gave approval for crypto custody to only a select group. The veto against it by Biden didn’t fare well over time. It’s an exciting period! (Zack Guzmán)
121 SAB (Staff Advisory Bulletin) has drawn considerable flak from the industry. Last year, lawmakers made an attempt to rescind the guidance.
Despite gaining bipartisan backing in Congress, President Joe Biden chose to veto the bill. It’s anticipated that the new administration under Trump will review this issue right away.
At present, the SAB 121 policy increases the cost and risk associated with holding cryptocurrencies for banks, which discourages them from providing crypto custody or related services to their clients.
Last year, Congress approved a repeal, but President Biden subsequently vetoed it. This is the third catalyst among three key factors identified by crypto entrepreneur Julian Fahrer for reaching a $5 million Bitcoin valuation: the approval of Spot ETFs, fair value accounting, and the ability of banks to hold Bitcoin (following the repeal of SAB 121),” writes Julian Fahrer.
Bitcoin and Crypto Markets Turn Green Again
After receiving recent updates, the cryptocurrency market exhibited a significant rebound from earlier daily declines. The value of Bitcoin plummeted to $89,000, marking its lowest point in two months. However, since then, Bitcoin has made a comeback, rising to $94,500 at the time this information was gathered.
Similarly, Ethereum and Aave (an altcoin associated with Trump-backed World Liberty Financial, WLFI) both experienced a trend. Ethereum climbed back from a dip under $3,000 to $3,100. In just one hour, Aave witnessed a 5% surge.
Moreover, further reports indicate that Trump’s executive orders could potentially enhance the ability of cryptocurrency businesses to access banking services. These orders seem poised to address concerns within the industry about practices often referred to as “de-banking”.
Recently, FDIC Vice Chair Travis Hill voiced criticism towards past limitations imposed on cryptocurrency companies. He advocated for more transparent regulations to foster growth within the sector.
As a crypto investor, I’m keeping an eye on the potential changes within the financial sector. Reports suggest that Trump’s team is considering reorganizing the FDIC and combining banking regulators to enhance efficiency – a move that could have far-reaching implications for our investment landscape.
Additionally on this significant day, there are more encouraging advancements in the realm of cryptocurrency to anticipate. The appointment of David Sacks as the inaugural Crypto Czar is one such development, while Paul Atkins, a crypto-friendly regulatory figure, takes charge at the Securities and Exchange Commission (SEC).
In addition, prominent cryptocurrency companies such as Ripple, MoonPay, and Kraken have made substantial contributions to Trump’s inauguration activities. These donations potentially provide them with early opportunities to engage in talks with the administration about future crypto regulations.
Next week’s inauguration of Trump is anticipated to signal a shift in U.S. cryptocurrency policy, potentially fostering an environment that encourages expansion and stability within the industry. The market, which has been affected by previous volatility, views this development as a positive sign under a more crypto-friendly administration.
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2025-01-14 01:58