During the 2024 Presidential campaign, Donald Trump stated that the federal government’s hostility towards crypto (which we saw under the last administration) would be reversed.
That was exciting news for investors.
Trump hasn’t been a skeptic. He likes crypto and wants to promote its use, and, now that he’s in office, he’s working to make good on that promise.
What may surprise you, though, is that his primary tool to promote crypto usage is by regulation
WAIT – more rules and red tape are a good thing?
For many business people and investors, the idea of government regulations helping is more of a punch line than a reality.
The reality is that regulations often stifle growth more than helping.
In the case of crypto, regulations (at least those put forth by a crypto-friendly administration like Trump’s) could help.
To understand what’s going on here, let’s first look into what kind of regulation that the Trump administration is considering. MacKenzie Sigalos at CNBC writes,
As David Sacks, the newly appointed White House AI and crypto czar, collaborates with lawmakers on potential regulations for digital assets, one of the first things they’ll be focused on is stablecoins.
Stablecoin? As in cryptocurrencies tied to other assets, such as physical assets (gold, silver, or other commodities) or the fiat currency of a nation?
Yes, exactly that.
And why are they looking into stablecoin specifically?
Lawmakers are now promoting U.S.-based stablecoin issuance, reinforcing the dollar’s dominance through digital finance. Supporters like Sacks say such a move could drive trillions of dollars in new demand for the dollar and help lower long-term interest rates.
So, it’s a practical effort to drive demand for the U.S. dollar worldwide and to help the economy.
And we’re already seeing Trump’s cryptocurrency support having an impact. Lawrence Wintermeyer for Forbes writes,
Abdul Rafay Gadit […] explained, “Trump’s clear dictums will catalyze crypto adoption rates as big investors, financial institutions, and retailers actively start investing in crypto. We’ve seen how, soon after the executive order, $1.19 billion flowed into crypto ETPs, taking the total assets under management to $171 billion, with Bitcoin ETPs making 82 percent of the total value.”
That’s all nice and dandy, but it could mean more for you than you think. Why? Because…
“This marks the beginning of a golden age of the American economy fueled by crypto assets.”
All of that is fantastic news and a reason to be bullish about crypto. There is, however, a bigger reason…
Why Trump’s common-sense crypto approach is great news
Here’s why these regulations, along with human nature, help everyone involved in crypto.
You have to understand that the average person is rather risk-averse. That’s why they don’t invest in anything…
Unless they can be made to feel more secure about it.
What Trump’s regulations will do is that they will help to give regulatory clarity so that larger institutions know what they’re working with.
Once they know what the regulations are and how they will actually work, larger institutions will get even more involved in crypto.
This isn’t speculation. Large institutional investors go where they can make money without fear of backlash from government regulations that can be reinterpreted on a whim.
So, larger institutional investors getting much more involved in crypto is almost a certainty once those regulations are in place.
And with larger institutional acceptance, more of the average individual investors will be comfortable getting involved in crypto because if the government supports it and if large companies invest in crypto…
… the average American will begin to see that crypto’s potential far outweighs its risks. That, in fact, missing out on crypto’s future is the biggest risk of all.
And when the average person is comfortable owning, using and investing in crypto?
The next crypto adoption boom is just around the corner
When the average investor starts moving into the crypto markets heavily, that increased demand for crypto will drive up prices, increasing the overall value of crypto, which will bring even more people into the crypto market…
It will be a virtuous feedback loop! A self-reinforcing, upward spiral. Perhaps, as many have said, all the way to the moon.
Of course, the smart money, whenever possible, gets ahead of the boom by getting involved early. While it’s too late to be an early adopter, it’s NOT too late to diversify into the cryptocurrencies sector. Why wait? You can get started right now in about 10 minutes! Alternately, to learn more about the benefits of diversifying your savings with cryptocurrencies, get your free Insider’s Guide to Digital IRAs.
