Cypriot financial analyst, founder of Wheelerson Management Ltd, and owner of Osome Group, Grigory Burenkov examines the evolving approaches of leading U.S. politicians towards the crypto industry.
As the 2024 presidential elections approach, cryptocurrencies, once seen as a fringe financial tool, are now taking center stage in political discourse. Leading candidates from both parties are showing increased interest in digital assets, potentially marking the beginning of a new era in the relationship between the state and the crypto industry.
A few years ago, the idea that Bitcoin would become a topic in election campaigns seemed far-fetched. However, today we see former U.S. President Donald Trump, who once called cryptocurrencies a “scam,” now promising to turn the U.S. into a “Bitcoin superpower.” At the same time, Vice President Kamala Harris’s team is actively building ties with key players in the crypto industry, signaling a possible softening of the Democrats’ stance on digital assets.
According to Grigory Burenkov, these changes in rhetoric from leading U.S. politicians raise several important questions. “For instance, what are the potential regulatory changes for cryptocurrencies in the U.S. and globally?” Burenkov notes. “Or how might this affect the future of digital assets and their role in the global financial system? And generally, what is driving such significant shifts?”
Donald Trump: From Deep Skepticism to Active Support
As U.S. President in 2019, Donald Trump openly expressed his negative attitude towards cryptocurrencies. At the time, he tweeted: “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.” This position reflected the sentiments of many traditional financiers and politicians of that era.
Trump’s stance towards the crypto industry may have been changed by the unexpected success of his own NFT collection in 2022. This event seemingly opened his eyes to the potential of digital assets and their ability to mobilize significant financial resources.
However, the most significant indicator of Trump’s changing attitude towards the crypto industry came during his recent speech at the Bitcoin 2024 conference. Bloomberg noted that he made a series of bold statements. “If Bitcoin is going to the Moon, I want America to be the nation that leads the way,” Trump said to audience applause. “If cryptocurrency is the future, I want it mined, minted, and produced in the USA,” he added.
Trump’s change in rhetoric has not gone unnoticed by the crypto community. According to media sources, his campaign accounts have received approximately $3 million in digital currencies since his speech. Moreover, the pro-Trump PAC Fairshake has raised over $200 million from industry giants like Coinbase, Ripple, and the venture firm Andreessen Horowitz. This demonstrates that the crypto industry is ready to provide substantial financial support to politicians advocating for their interests.
If Trump returns to the White House, his new stance could have far-reaching implications for cryptocurrency regulation in the U.S. and globally. Burenkov believes that in this scenario, the White House Administration would begin to prepare a more favorable regulatory framework for the crypto industry. “I agree with experts who think that this could lead to a revised approach by the SEC to regulate crypto assets and the development of new legislative initiatives supporting the growth of digital currencies,” he notes.
Kamala Harris: A Cautious Evolution
Vice President Kamala Harris’s position on cryptocurrencies represents a more nuanced but equally significant transformation in the U.S. political landscape. As part of the Biden administration, Harris initially shared the general skepticism of Democrats towards cryptocurrencies.
This approach was characterized by concerns over investor risks, the potential use of digital assets in illegal activities, and their impact on financial stability.
However, in recent months, there have been signs that Harris and her team are reconsidering their stance on digital assets. According to the Financial Times, Harris’s advisors have started actively building connections with key players in the crypto industry, including Coinbase, Circle, and Ripple Labs. For Democrats, it is especially important to show that they are no longer opposed to digital innovations, and restoring lost ties with the tech sector is crucial given Trump’s support from key crypto business figures.
“I share the view of those who believe that if Kamala Harris wins, her actions will aim at achieving a bipartisan consensus on cryptocurrency regulation,” Burenkov suggests.
Actions Must Follow Bold Statements
Overall, the crypto community has welcomed the change in rhetoric from leading politicians. Burenkov believes the world may be experiencing a historic moment: “For the first time, leading U.S. politicians openly acknowledge the potential of cryptocurrencies. This could be a turning point for the entire industry. Of course, there are concerns that the alignment of cryptocurrencies, like Bitcoin, with the state could lead to compromises in decentralization and anonymity, negatively affecting the very idea of a digital asset free from political influence.”
Regardless, the crypto community is at a crossroads, balancing the desire for recognition and support from traditional power institutions with the aim of maintaining the fundamental principles of decentralization and financial freedom. The future relationship between the crypto industry and the U.S. political establishment will largely determine the future of digital assets not only in America but worldwide.
Burenkov emphasizes: “It is important to understand that bold statements must be followed by concrete actions. The next administration, regardless of who wins the election, is expected to propose a clearer and more favorable regulatory framework for the crypto industry.”
Prospects for the SEC
Regardless of which candidate wins, significant changes are expected in the approach of the state regulator. If Trump wins and appoints a new SEC chairman, we can expect a more flexible regulatory framework for the crypto industry, a review of criteria for classifying digital currencies as securities, and an acceleration of the approval process for cryptocurrency ETFs.
If the Democrats retain power, Harris’s more open stance will lead to a softened regulatory approach and constructive dialogue with industry representatives to change the legislative framework for digital assets.
Burenkov concludes: “One thing is clear: the status quo is unlikely to remain, and the industry should prepare for significant regulatory changes.”
Cryptocurrency Prospects: Between Optimism and Uncertainty
Recognition of Bitcoin at the state level can attract institutional investors and accelerate the mass adoption of cryptocurrencies. Experts note that traditional and conservative financial institutions, such as banks, hedge funds, and insurance companies, have begun to show interest in digital assets. The almost daily emergence of new blockchain technologies opens up additional opportunities for cryptocurrency applications.
Burenkov notes: “Despite current challenges, the fundamental factors for the growth of the crypto industry remain strong. We are seeing growing interest from institutional investors, infrastructure development, and expanding applications for blockchain technologies. Support from the U.S. political establishment could serve as a catalyst for a new growth phase.”
On the other hand, the crypto community still faces issues of high asset volatility, hacking attacks, and scalability limitations. An open dialogue with the political establishment will help overcome the current legal uncertainty surrounding digital assets.
“We may be on the verge of a new era for cryptocurrencies,” Burenkov concludes. “If the U.S. manages to balance innovation with investor protection, it could strengthen its position as a global leader in digital finance.”
