Ready, set, Trump admin
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Heading into a second Trump presidency and a Republican-led Senate has infused a palpable optimism in the cryptocurrency industry.
Why it matters: The details are taking shape of who will fill positions central to crypto realizing its hyped potential.
Catch up fast: In case you hadn't heard: Donald J. Trump will return to the White House in January.
- We know two things for sure: his chief of staff (Susie Wiles); and that his team has been working on appointments for a while.
We know that the co-chair of his transition team, Cantor Fitzgerald CEO Howard Lutnick, is a major holder of bitcoin, and an executive who runs a company that counts Tether, the biggest stablecoin company, as a major client.
- Investors who are long cryptocurrency appear to have his ear, such as Craft Ventures' David Sacks, real estate developers Steve and Zach Witkoff, and, reportedly, Marc Andreessen.
- (Worthy of your time: Lutnick did a long interview on Anthony Pompliano's podcast, and talks about his unorthodox ideas for revenue in a Trump administration.)
State of play: We know that the popular pick for Treasury secretary, Scott Bessent, said in July that he was "excited" about Trump's embrace of crypto.
- And people reportedly being considered to lead the SEC include pro-crypto commissioners past and present.
In Congress, Sen. Tim Scott is expected to be the chair of the banking committee, promising a light touch on the original cryptocurrency.
- However, crypto-critic-in-chief Sen. Elizabeth Warren could become the Democrats' ranking member on the same committee, inevitably creating friction for any legislation Scott and the GOP may want.
Meanwhile, Senate leadership is up for grabs. Sen. John Cornyn (R-Texas), Sen. John Thune (R-SD) and Sen. Rick Scott (R-Fla.) are the lead candidates.
- All of them have "A" grades from Stand With Crypto, but Cornyn is from the state that has the strongest Bitcoin industry in the country.
- (Stand With Crypto gave Scott poor marks for writing this May 2021 letter, but the questions it poses are ones that most people in the industry would view as fair.)
In the House, it remains to be seen who will lead Financial Services. If the Democrats prevail (unlikely), it will be Rep. Maxine Waters (D-Calif.), who has come around.
- Under a Republican House, various candidates want Financial Services. The lead candidates have been supportive of the industry. Rep. French Hill (R-Ark.) chairs the digital assets subcommittee.
The big picture: While Democrats seemed to find an easy scapegoat in the crypto industry after FTX crumbled, the issue barely showed up in campaigns this cycle.
- Opposing the industry doesn't appear to have won votes, but supporting it brought money.
- One key decision borne of that 2021 political misstep, was the selection of SEC chair Gary Gensler. Unless something surprising happens, however, he is probably in the last few weeks of his tenure.
Reality check: Government is slow. And many of the things the industry wants — clear rules first and foremost — take time.
- The new administration likely keeps it simple early on — and simple means bitcoin.
💠My thought bubble: For the government, not selling seized bitcoin is simple. So is leaving Bitcoin miners alone.
- What's hard? Writing rules around what coins are securities and which ones aren't. That likely means that it's also hard for the SEC to approve new exchange-traded products out of the gate.
- The intrigue: The Bitcoin community was also much more unabashedly pro-Trump than the larger cryptocurrency industry. No doubt the Trump team noticed the difference.
The bottom line: The received wisdom in crypto circles has been that growth was ready to take off if only regulators would quit suing its best companies. Soon — quite likely — it will be time for founders to show the public what they've really got.
