Crypto industry receives White House support amid regulatory shifts, but faces challenges with Bitcoin prices and potential speculative risks.

In Short

The crypto industry is evolving with new regulatory changes and seeks legitimacy amid challenges.

Despite potential benefits from blockchain technology, concerns about legitimacy and regulation persist, particularly in light of Bitcoin’s speculative nature.

The crypto industry continues to develop, facing challenges and opportunities amid shifting regulatory landscapes.

Bitcoin remains over 20% below its January peak, as the White House presents new support for the sector.

For years, the industry has blamed strict regulations for stunting its growth. However, recent changes in leadership and some relaxed enforcement by the SEC signal a potential shift.

Government oversight

Following the transition in the White House, major players in the crypto sector are beginning to seek legitimacy through government oversight, hoping for less stringent regulation.

In a recent interview, Eswar Prasad, a Cornell professor, highlighted the dual nature of the crypto industry’s current state. While blockchain technology offers significant potential, questions remain about its real-world applicability.

Prasad pointed out that many firms have yet to realise substantial benefits from adopting blockchain for operations. Nonetheless, the stablecoin sector is gaining traction, exploiting existing frictions in financial systems.

There are concerns about the legitimacy of the industry, with some of its more dubious elements, such as meme coins, receiving government endorsement. The administration’s reluctance to use taxpayer money for Bitcoin purchases also drew criticism, as it raises questions about the strategic value of a potential cryptocurrency reserve.

Prasad expresses skepticism about the practical benefits of a strategic reserve, given Bitcoin’s speculative nature.