Bitcoin and Crypto Poised for a Deregulation Boom: What It Means for Investors
Could Bitcoin and Crypto Be Heading for a Deregulation-Fueled Surge?
Cryptocurrency, especially Bitcoin, has been declared dead so many times that its supposed demise is now a running joke. According to 99Bitcoins, Bitcoin’s obituary has been written at least 477 times since 2010. Most recently, a wave of skepticism hit in 2022 after the collapse of major crypto-trading firms like FTX and lawsuits from the Securities and Exchange Commission (SEC) against blockchain companies. Even prominent voices like tech investor Chamath Palihapitiya proclaimed, “Crypto is dead in America,” during an April 2023 episode of the All-In podcast. Reputable outlets like The Wall Street Journal and The Atlantic echoed similar sentiments, questioning the longevity of Bitcoin and the broader crypto sector.
Yet here we are, witnessing a remarkable recovery in the digital asset market. Crypto, led by Bitcoin, is proving its resilience once again.
Bitcoin and Crypto’s Resurgence in 2024
Surprisingly, the total market capitalization of crypto assets has skyrocketed past its 2021 all-time highs. This revival is not just about market performance; the political landscape has played a pivotal role. The crypto industry has become a leading donor in this election cycle, even surpassing contributions from the fossil-fuel sector. With bipartisan support, crypto lobbyists have succeeded in influencing legislation.
In May, the House of Representatives passed a bill aligned with many demands from crypto advocates. Meanwhile, the Senate rolled back SEC guidelines aimed at protecting cryptocurrency consumers. President elect Trump has hitched himself to bitcoin and the crypto industry which is connect to the masive rise of the bitcoin price recently.
How Bitcoin and Crypto Bounced Back
This rapid recovery didn’t happen by chance. The crypto sector shifted its approach, spending over $130 million to influence congressional races and refine its messaging. The industry has swapped its earlier image of unpolished disruptors like Sam Bankman-Fried for polished professionals—MBAs, lawyers, and Ivy League graduates—who know how to navigate Washington.
The message now? Normalize crypto. Industry leaders are pushing for regulation to establish clear guidelines, framing themselves as legitimate players eager to operate within the rules. Publicly, they emphasize practical, mundane uses for cryptocurrencies while distancing themselves from scammers and speculative traders.
The Risks of a Deregulated Crypto Market
While the current political climate is improving for the crypto industry, there’s still a darker side to consider. Scammers and fraudsters are evolving, finding increasingly sophisticated ways to exploit retail investors. A more lenient regulatory environment could enable not just legitimate innovation but also criminal activity.
It's important to remember that nobody wants to open the door to more criminal behavior, least not the crypto industry who wants more regulation to improve it's image. The new regulations will need to protect all investors while still providing the robust entrepreneurial spirit of innovation.
The Future of Bitcoin and Crypto
The crypto industry insists it seeks to be boring—an asset class with nothing to fear or criticize. However, the stakes are higher than ever. As Bitcoin and the broader crypto market teeter on the edge of a potential deregulation-fueled boom, investors and regulators alike must weigh the opportunities against the risks.
Whether you're an enthusiast or a skeptic, one thing is clear: Bitcoin and crypto are far from dead. They’re evolving, and the decisions made in the next few months could define their future for years to come.
