Crypto in the US in 2025 – Out with the old, in with the new?

With the election of Donald Trump the excitement and optimism around bitcoin and crypto continues to increase. Bitcoin’s price has exceeded the $100,000 level for the first time, altcoins including XRP, ADA and ALGO have rebounded and talks of strategic bitcoin reserves have evolved, all leaving crypto advocates looking forward to 2025.

40% of American adults now own crypto, up from 30% in 2023 and amongst current crypto owners, around 63% hope to obtain more cryptocurrency over the next year. (Source: Security.org)

So RecuitBlock decided to look deeper into some of the confirmed changes, plus a few speculated changes, that 2025 may hold for US crypto.

• New SEC Chair

President-elect Donald Trump has announced Paul Atkins, a former SEC commissioner and current CEO of Patomak Global Partners, as his nomination to run the SEC.

Atkins will succeed outgoing SEC Chair Gary Gensler who has taken several enforcement actions against crypto companies. This included several premised on the idea that some crypto exchanges simultaneously operate as unlicensed exchanges, clearinghouses and brokers. There are currently over 50 cryptocurrencies that the SEC has accused of being a “security”.

In its 2023 cases against Binance and Coinbase the SEC included BNB, Binance USD, Solana, Cardano, Polygon, Cosmos, The Sandbox, Decentraland, Axie Infinity, COTI, Chiliz, Flow, Internet Computer, Near, Voyager Token and Nexo within their securities classification.

In contrast Atkins is viewed as more ‘crypto-friendly’ and co-chairs the Digital Chamber’s Token Alliance and is an adviser to Reserve Protocol. He previously served as a commissioner at the agency between 2002 and 2008 under former President George W. Bush

• New Crypto and AI Czar

Trump has also announced he will appoint venture capitalist and former PayPal Chief Operating Officer David Sacks as White House AI and Crypto Czar.

Sacks remit will be to guide policy in AI and Cryptocurrency and focus on making the US the global leader in both areas.

Similar to Atkins, Sacks is an active crypto participant with roles at MultiCoin Capital and Craft Ventures, which counts BitGo and Bitwise as portfolio companies.

• Legislation

On May 22nd 2024 the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT 21), seen at the time as a major step towards meaningful regulation of the crypto industry in the US.

FIT21 sought to create a federal framework for cryptocurrency regulation, establishing jurisdictional boundaries between the Commodity Futures Trading Commission (CFTC) and the SEC. It would curtail the SEC’s authority over digital assets that meet certain criteria and seek to end what the crypto industry sees as the SCE’s “regulation by enforcement” approach. However it would also cede much of that authority to the CFTC instead.

With Republicans now having control of the White House, the Senate and House there may be an opportunity to create new regulations and not try to push over the line a bill widely viewed as imperfect by many in the US crypto and defi space.

• Bitcoin Reserve

During his 2024 election campaign Trump made many crypto-related promises, including establishing a “strategic Bitcoin stockpile.” The idea has since gained momentum in the US and abroad.

The US would buy Bitcoin and secure it with a qualified custodian, similar to how governments manage other strategic reserves, like gold in Fort Knox or oil in national stockpiles. It’s an approach that El Salvador and Bhutan have already adopted. It can be seen as a hedge against inflation and the growth value may be able to reduce debt. Nevertheless, there are some concerns, like the volatility of the market eroding the value of the reserve, as well as secure storage and protection of private keys.

Several states may also introduce legislation supporting a Strategic Bitcoin Reserve, marking an expansion of state-level crypto initiatives.

• Tax

President Trump’s administration may eliminate capital gains taxes on cryptocurrencies issued by U.S. registered companies. If enacted, this move would exempt US investors from taxes on profits gained from holding certain digital assets. Were this to happen it could drive significant capital inflows to US-based cryptocurrencies.

It has been suggested that the legislation would only apply to assets issued by entities that registered within US borders before their tokens’ issuance. A relocation pathway, however, would allow foreign entities to reestablish themselves in the US and then benefit from this exemption.