After a dramatic start to the year, the crypto industry is adapting to a new reality where the White House is offering unprecedented support. The SEC has dropped several enforcement cases against crypto companies and is hosting public roundtables to discuss crypto asset regulation. Despite this, the same administration’s trade policy is affecting financial markets’ risk appetite, leaving bitcoin more than 20% off its record high. Some investors are cautious about the White House’s embrace of aspects like meme coins.
Eswar Prasad, a Cornell University professor, discussed the forces disrupting financial technologies. He views crypto pragmatically, noting that while blockchain technology is remarkable, it may not be the best solution for all claimed purposes. Bitcoin has become a speculative asset rather than a trustless medium of exchange. Stablecoins, pegged to assets like the US dollar, are gaining traction and benefiting from regulatory ease.
The administration’s decision not to use taxpayer money to buy bitcoin under a strategic reserve plan disappointed markets. Prasad criticized the idea of a crypto strategic reserve, arguing it lacks intrinsic value and strategic purpose. If the government were to sell its crypto holdings, prices would likely plummet.
— news from CNN