January 13, 2025
Crypto Is Set to Get a Boost from THIS Unlikely Source
Dear Subscriber,
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| By Beth Canova |
Monday at noon will mark the arrival of the first pro-crypto administration in U.S. history.
No matter how you feel about the politics of it all, most people in the crypto community can agree on one thing.
That is, a welcoming regulatory environment can open up a whole new world of opportunities. Especially in the decentralized finance sector.
It’s no secret that the outgoing administration was much more cautious about … and sometimes downright hostile toward … crypto.
Despite this, the U.S. represented about 22% of global crypto activity year-over-year in 2024.
That makes it the largest crypto market in the world, according to Chainanalysis. (See the top red line in the chart below.)
The next largest market is Western Europe, represented by the orange line.
Western Europe is more permissive in which platforms are allowed to operate and what services are available to individuals.
Meanwhile in the U.S., the majority crypto activity comes from institutions.
In fact, some 70% of the U.S. crypto activity between 2023-’24 consisted of transfers exceeding $1 million.
And they want clearer regulation and access to those platforms and services.
That’s right …
We may see a renewed push for updated and improved crypto regulation … from TradFi institutions.
It sounds shocking at first. But a quick look back over the past year shows the writing has been on the wall for a while.
Just look at the spark that ignited it all: the approval of spot Bitcoin (BTC, “A”) ETFs.
That led to BlackRock (BLK) suggesting that Bitcoin now belongs in more conservative portfolios.
Of course, the largest asset manager in the world shared this sentiment at the same time as it launched its iShares Bitcoin Trust (IBIT).
BlackRock specifically calls Bitcoin a “unique diversifier.”
That’s due to its low correlation with other assets and its decentralized nature. These help shield it from geopolitical risks and inflation.
That means, if you currently hold BTC, BlackRock's mere presence in this discussion probably has you cheering.
Its sway in the decision-making of TradFi institutions and investors is massive. And could potentially push even billions toward Bitcoin.
That, in turn, could make your current BTC gains soar.
And when Bitcoin goes up, the broad market is sure to follow in time.
That’s why centralized exchange Coinbase (COIN) unveiled the very first regulated crypto index — called the Coinbase 50 Index (COIN50) — in November 2024.
Designed to be the S&P 500 for crypto, it’s made up of the 50 best-performing cryptos on the exchange. That list includes Bitcoin, Ethereum (ETH, “A-”), Solana (SOL, “B”), XRP ( XRP, “B+”) and Dogecoin (DOGE, “B-”).
These five cryptos make up 89.6% of the fund, with an assortment of 45 other digital assets filling out the rest.
Top 5 weighted assets in Coinbase 50 Index as of Q4 2024.
Source: Coinbase.
Click here to see full-sized image.
The Coinbase 50 Index provides investors with a stable, easy-to-access entry into crypto, along with a way to benchmark their portfolios.
Now, more TradFi institutions are following suit. This reflects the growing demand for crypto exposure among TradFi investors.
The popular investment app Robinhood’s (HOOD) most popular use case has always been stock trading. But it is becoming a popular destination for new crypto users.
Today, Robinhood only offers 19 cryptocurrencies.
This isn't much compared to the thousands that exist. But the streamlined roster cuts out much of the noise that could intimidate the newer crypto investors who are filtering in.
This makes Robinhood an accessible alternative to other crypto exchanges and a great entry point for TradFi investors who already use the app for stocks.
And recently, it added four more crypto offerings to its list with a combined market cap of nearly $300 billon: Solana, Cardano (ADA, “A-”), Ripple (XRP, “B”) and, surprisingly, the Pepe ( PEPE, Not Yet Rated) memecoin.
Much like the Coinbase 50 Index, Robinhood’s crypto lineup is designed to be the best representation of what crypto has to offer so far.
Crypto Support in D.C.
As we look ahead, much of the excitement crypto enthusiasts have for 2025 goes beyond making crypto more accessible to a wider audience.
They are eager to see how far this new administration will go in terms of regulation.
President-elect Donald Trump has already appointed a new member to his Cabinet under a previously nonexistent title, “AI and Crypto Czar,” though it is unclear if that will be the official title.
The honor goes to David Sacks, a venture capitalist and “PayPal mafia” member alongside Elon Musk and Peter Thiel.
According to Trump, Sacks will, “work on a legal framework so the crypto industry has the clarity it has been asking for, and can thrive in the U.S.”
The news has been well received by those in the crypto community.
Matthew Dibb, chief investment officer at cryptocurrency asset manager Astronaut Capital, described the news as extremely bullish.
And Sacks isn’t alone.
Trump has appointed another crypto friendly cabinet member to head the SEC to replace Gary Gensler, who was seen as anti-crypto by those in the community.
It’s a position that Trump’s pick, Paul Atkins, is already familiar with, having held it under George W. Bush from 2002 to 2008.
And in the time since, Atkins has been busy as chair of the pro-cryptocurrency lobbying group Token Alliance.
Both of Trump's appointees have been vocal about their commitment to advancing pro-crypto regulations and stimulating innovation, particularly in the DeFi space.
Add to this news Elon Musk’s role as head of the new Department of Government Efficiency — shortened to DOGE, after the memecoin — and it almost seems like the 47th president is building his Cabinet specifically to advance crypto.
TradFi’s Next Steps
Volatility — the very thing that has made so many crypto traders rich — can be a deterrent to some TradFi investors.
It’s easy to understand, especially when looking at Bitcoin's price fluctuations over the past few years.
Some of you remember 2021, when it fell from $67,000 to $17,000. And the 2024 surge from $43,000 to over $108,000.
Heck, just looking at it over the past two months may be enough to spin a few heads.
That’s why, in the short term, we think most traditional financial advisers will follow BlackRock's example of investing a few percentage points in Bitcoin and other blue-chip cryptocurrencies as a speculative counterbalance to other assets.
In the meantime, don’t fall for the FUD — that is, fear, uncertainty and doubt — from those who might still warn that the end of the line is coming for crypto.
In the long term, our team sees virtually all TradFi institutions having their own coins.
At the very least, we’ll see them lead the push for better regulations and access to platforms and services already available to their European and Asian competitors.
That is why the next push for crypto reform will likely come from these unlikely sources.
Retail investors like you and I should be prepared. Because updated regulation means more access and opportunity from the rest of us.
As ever, your Weiss Crypto Team will continue introducing you to the best ideas and helping you stay far away from the rest.
Best,
Beth Canova
Crypto Managing Editor
P.S. One sector set to soar if regulation improvements come is DeFi. That’s because the current framework prohibits U.S. residents from accessing much of what DeFi can offer.
And that means even greater opportunities for DeFi yield hunters like Marija Matiฤ.
Even with our current regulations, Marija has helped her subscribers target yields of 101% … 912% … even 1,168%!
Those are real-world numbers. And with the first-ever pro-cryptoadministration set to take over, these exceptional yields could get even better.
That’s why I suggest you grab your seat for Marija’s Superyield Income Summit tomorrow, Jan. 14 at 2 p.m. Eastern. That’s where she’ll break down how she’s been able to target such high yields … and how you can, too.
Even better, it’s completely free to attend. All you need to do is RSVP here.
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