The cryptocurrency market has been booming since the election results that will see former President Donald Trump return to the White House in January 2025. The week after the election, bitcoin reached new all-time highs of over $90,000. The possibility of a strategic Bitcoin reserve becoming a reality sooner rather than later is being mentioned increasingly on social media and even in press releases from senators and members of Congress. Except for the market being bolstered by institutional bitcoin purchasers rather than a primarily retail-driven gain, this enthusiasm is reminiscent of past bull runs.
Along with the surge in Bitcoin’s price, other areas of the cryptocurrency market have also seen an increase in excitement and optimistic mood. The U.S. Treasury published more than 20 pages of data outlining the advantages and allure of stablecoins—and tokenized Treasuries—to U.S. financial markets and broader economic stability in the wake of PayPal’s significant forays into the stablecoin and cryptocurrency payment industries in 2024. Nevertheless, despite all this optimism and activity, there seems to be a sense that this is just the beginning of a much larger bull market.
As always, investors and crypto advocates need to be able to parse through what the market action is noise, what is based on fundamentals, and which aspects of this recent run might be beginning to exhibit bubble-like tendencies. Let’s look at a few items that crypto investors and policymakers should focus on even as Bitcoin and other tokens continue to reach fresh all-time highs.
Regulatory Progress Must Continue
As far as the cryptocurrency industry is concerned, one of the most readily measurable advantages of the impending administration transition is the anticipated shift in the U.S. regulatory framework toward a more pro-crypto stance. Investors are (rightly) hopeful that the next administration will be more accommodating to crypto assets, beginning with the anticipated dismissal or departure of SEC head Gary Gensler. Even while these emotions are hopeful, investors and policymakers alike must continue to concentrate on ensuring that a constructive and forward-thinking regulatory environment materializes.
In particular, the sector has a chance to create and, ideally, pass pro-crypto legislation as it is anticipated that a pro-crypto Congress will be sworn in with the new government. The legislation will need a persistent and composed attitude to regulatory procedures and the anticipated pace of change. Still, announcements, constructive social media postings, and interactions are great instruments to shift the narrative.
Stablecoin Integration Is Paramount
Even while cryptocurrency markets are booming, the truth is that relatively few Americans use cryptocurrency as a form of payment. Just 17% of American individuals have ever invested in, owned, or utilized cryptoassets, according to Pew Center data from 2024. This ratio has stayed the same since 2021. Furthermore, 63% of respondents said they needed more confidence in the reliability of the present alternatives for carrying out any of the tasks above. Recent news about stablecoins is being appropriately characterized as good forward development, as they are the first specifically created crypto assets intended to be used as a medium of exchange via the link between the tokens and fiat currencies like the USD.
That said, while the stablecoin marketplace is rapidly approaching $200 billion in market capitalization, data reported by Chainalysis should serve as a reality check for crypto proponents. According to the report, the U.S. ranks 4th globally in total crypto adoption, with even that ranking being driven by institutional investors and traders (as determined by transactions of $1 million or higher), and stablecoin adoption has stalled.
Stablecoins should continue to be a priority for regulators looking to expand the cryptocurrency sector, even if the new Trump administration is still determining what steps it will take to promote stablecoin adoption or future development.
Investor Education Is Critical
One aspect that can easily be overlooked in the discussion and hype that has recently accompanied Bitcoin and other crypto assets is that, for a large percentage of the investing public and retail investors, the value proposition and mechanics for how crypto functions remain a mystery. While Congress will receive many pro-crypto members, with these members also being well-educated, more mainstream and entry-level education is necessary. The crypto industry should take the question of investor education seriously, especially with the influence of social media platforms and the genuine dangers posed by meme coins and other tokens that lack economic merit.
A better informed investor community represents a worthwhile goal in itself. It will also make it simpler to root out fraud, bad actors, and other activities that could cause economic distress and damage.
Bitcoin price appreciation is worth celebrating but should not overshadow the remaining important work.