Crypto’s new regime in the US: What investors should know

On Monday, Donald Trump will be sworn in as the 47th president of the United States. November’s election results have been particularly significant for the emerging digital assets industry, with a new Congress overwhelmingly comprised of pro-crypto policymakers.

Regulatory clarity has long been an important enabler of the crypto industry’s growth and for fostering investor confidence. We believe 2025 will likely be a year of significant leaps forward in this regard. In the US specifically, digital asset market structure legislation, stablecoin legislation, and the repeal of the onerous SAB 121 regulation—which has prevented large US banks from holding crypto assets in custody—are some of the major policy initiatives that many investors are anticipating from the new administration and Congress.

While many of these developments are being priced into bitcoin and other crypto assets post-election, we believe there is more positive price movement to come as key regulators and other administration officials are confirmed, set their agendas, and new policies advance.

Going forward, there certainly is downside risk if anticipated policy outcomes differ from what the market expects, so we are anticipating continued price volatility in the coming months. But this volatility doesn’t change our view that 2025 will be a very strong year for the asset class. As we’ve seen in the past, large drawdowns are part of the bull market phase of crypto’s cycles, and this year will likely not be any different.

Source: Hashdex Research with data from Messari (from July 21, 2010 to December 31, 2024).

Past performance is not a guarantee of future results.

Chart data was calculated using daily close prices (not considering intraday movements).

It’s not, of course, just regulatory clarity that is driving crypto prices. We think it is only one of three pillars that will help establish crypto assets and blockchain technology as a cornerstone of the global economy over time. Crypto innovation and adoption are the two other pillars investors should be thinking about as this bull market takes shape.

Innovation will push boundaries of technology and utility

Scalability improvements in smart contract platforms enhance network throughput, reduce transaction costs, and improve user experience. These advancements allow these platforms to support applications in decentralized finance (DeFi), artificial intelligence (AI), and blockchain-enhanced social experiences, unlocking new use cases beyond value transfer.