Joe Biden Might Finally Become Crypto Friendly
By Olivier Acuña | TH3FUS3 Chief Editor
May 21, 2024 12:18 PM
Reading time: 3 minutes, 5 seconds
TL;DR The Biden administration is rumored to shift its stance on crypto regulations, potentially aligning closer with the digital asset community. Bloomberg analysts have increased their forecast to approve a spot Ether ETF from 25% to 75%. This move signals a significant change in the SEC's stance and could impact upcoming elections.
Biden Administration Eyes Crypto-Friendly Shift
The Biden administration may be preparing for a strategic pivot on crypto regulations. This move could align the government closer to the digital asset community before the November election.
Recent developments indicate that the Securities and Exchange Commission (SEC) may approve a spot Ether ETF, marking a significant change in stance.
On Thursday, Bloomberg ETF analysts James Seyffart and Eric Balchunas dramatically increased their forecast to approve a spot Ether ETF from 25% to 75%. They cited sources close to the SEC, noting a sudden change in sentiment.
This shift reflects a broader political recalibration by the Biden administration in response to former President Donald Trump's endorsement of Bitcoin and cryptocurrencies.
This news has sent shockwaves through the financial and crypto markets. Ethereum and other altcoin prices experienced double-digit surges.
The approval process requires the SEC to green-light both the 19b-4s, which involves exchange rule changes, and S-1s, the registration statements needed for ETFs to launch. This move is the first concrete sign of the Biden administration's reorientation towards a more crypto-friendly policy framework.
Reactions from Experts
Several experts have come forward, speculating on a complete turnaround from the Biden administration.
Haseeb Qureshi, managing partner at Dragonfly, stated via X: _, "I've been saying for weeks that Biden is going to soften on crypto going into the election. He doesn't want to lose votes in a tight race over what is ultimately a minor issue to him.
ETF is the first sign of this. We will also see other agencies softening in the next few months."_ This sentiment suggests a tactical adjustment rather than a complete policy overhaul aimed at mitigating political risks rather than championing digital currencies.
Sam Lyman, Director of Public Policy at Riot Platforms, highlighted a series of crypto-friendly shifts. These include Trump's overt support for digital assets, the SEC's policy reversal on the Ether ETF, and significant legislative developments.
Lyman provided a list of recent victories for the crypto sector, such as the repeal of SAB 121 and the resignation of the FDIC Chair, which were seen as the result of political pressures from pro-crypto factions.
Implications Beyond the Market
Jake Chervinsky, Chief Legal Officer at Variant Fund, commented on the potential implications of the ETF approval beyond its market impact. _"If the spot ETH ETF is approved, it will shock everyone I know in DC who's close to this process.
That doesn't mean it won't happen. It means approval could signal a significant shift in US crypto policy after the SAB 121 vote, perhaps more critical than the ETF itself,"_ Chervinsky explained.
Vijay Boyapati and Adam Cochran both agreed with Chervinsky. Boyapati, a renowned crypto expert, pointed out the political calculations at play, suggesting the Democrats were recalibrating their stance to mitigate electoral losses. _"The abrupt about-face by the SEC on the Ethereum ETF approval is nakedly political.
The Democrats have seen that their hostility could potentially cost them the election, and Biden likely commandeered the SEC to be more friendly despite the [Senator] Warren wing of the party,"_ Boyapati remarked.
Cochran, partner at CEHV, expanded on this, indicating a broader realization within the Democratic Party that a pro-crypto stance could appeal to a broader voter base. This includes moderates and independents focused on financial policies.
He remarked via X: _"Warren had a stranglehold over financial policy under the Dems. This shows that the WH and Senate Dems are starting to realize that's toxic to their election odds. [...] This is a big and rapid shift in crypto policy, [...] If that's accurate, it's more important than the ETF itself. It could mean the winter is over, and it's time for a US renaissance in crypto!"