11 Nov, 2024

A16z Crypto Says Tokens Will Likely Be ‘Legitimate and Lawful’ Under New Regulations

Quick Take① A post from a16z crypto’s Policy and Regulations team discussing the ramifications of Trump’s re-election says it’s too early to predict specific regulations, but crypto founders should expect a less hostile regulatory environment.② Founders can now “feel empowered to explore all of the groundbreaking products and services that blockchains enable, including tokens,” the post states. A16z Crypto Says Tokens Will Likely Be ‘Legitimate and Lawful’ Under New RegulationsAs the cryptocurrency industry continues to make gains in the wake of the re-election of former President Donald Trump on Tuesday, notable VC firm a16z crypto has a message for crypto founders: When it comes to regulations, you can finally relax. "The good news is that there is now a pathway for constructive engagement with regulatory agencies and legislation that can bring regulatory clarity," a16z tells crypto founders in a new post. " You should now all feel empowered to explore all of the groundbreaking products and services that blockchains enable, including tokens."The post, written by a16z crypto's heads of policy and regulatory alongside its general counsel, sets out an optimistic expectation for laxer regulation and governance of the crypto sector under the incoming administration, though it says that the "vast majority" of speculation on the specifics of such a regime are just "noise" at this point. The post specifically calls out token issuance as one activity founders can have more confidence in. "For many of you who have delayed using tokens to distribute control of your project and build community due to fears of regulatory overreach, you should now have greater confidence in your project’s use of tokens as a legitimate and lawful tool," the post states. The authors, Miles Jennings, Brian Quintenz, and Michele Korver, also gestured towards a16z's plans for next year. "Next year, we’ll advocate for clear regulatory frameworks that foster and bolster innovation and decentralization...We’ll also soon release new guidance on the use of the Decentralized Unincorporated Nonprofit Association (DUNA) for projects looking to make the U.S. home, insulate tokenholders from liability, manage tax and compliance needs, and enable greater economic activity," the authors wrote, referencing Wyoming's unique law regarding DAOs. While the post is optimistic, the authors note that some behaviors may still run afoul of regulators. "While we’ll likely have greater flexibility to experiment, we can’t forget that the fundamental regulatory principles applicable to blockchain systems remain unchanged," the authors wrote, advising founders to "continue to focus on removing centralized aspects or dependencies on trust within your projects, as these are the areas that continue to attract regulatory scrutiny." "We’re optimistic that with clearer rules, it will make it easier to identify and shut down bad actors and allow well-meaning projects to take off," Jennings said in a post on X.

06 Nov, 2024

Crypto’s Regulatory Headwind Has Turned Into a Tailwind Following Trump’s Victory

Quick Take① Analysts at Bernstein said that crypto’s regulatory headwind had turned into a tailwind following Donald Trump’s election victory.② The analysts also reiterated their call for bitcoin to approach $90,000 by the end of this year and reach a bull cycle target of $200,000 in 2025.Crypto's regulatory headwind has turned into a tailwind following Trump's victoryFollowing Donald Trump’s win in the U.S. presidential election, analysts at research and brokerage firm Bernstein said that crypto’s regulatory headwind had now turned into a tailwind — and the market is “nowhere close to factoring in this shift.”The analysts, led by Gautam Chhugani, told clients in a Wednesday note they expect a new “crypto-friendly” Securities and Exchange Commission Chair and Senate Banking Committee to accelerate regulatory clarity for the industry. Under current Chair Gary Gensler, the SEC has embarked on several legal battles with key players, including Coinbase, Binance, Kraken and Robinhood, as well as against DeFi, NFT and stablecoin projects.The crypto industry seeks new rules on defining digital assets as something other than securities, the applicability of broker/dealer laws to crypto exchanges and DeFi, accelerated approvals for investment products like ETFs and enabling banks to own and custody crypto, Chhugani noted.In particular, the analysts predict faster progress on stablecoin and market structure bills, positively impacting stablecoin issuers such as Circle and Paxos and U.S crypto exchanges. They expect progress on other crypto rules and definitions over the medium term, leading to a re-rating of broader crypto assets outside of bitcoin and ether, which have been “suppressed due to regulatory overhang and lack of clarity on [their] security status.”Trump’s newfound pro-crypto stance put forward many policy promises during the campaign, including firing Gensler on “day one,” turning the U.S. into a bitcoin mining "powerhouse" and creating a national strategic bitcoin reserve, which the analysts also expect the new administration to make positive steps toward.The Republicans are also set to pull off a sweep of the presidency, House and Senate, with Trump winning the popular vote, to the surprise of many. “The crypto super PACs were instrumental in sending crypto friendly representatives to the Senate and the House. We expect a new regime of crypto rule making and this transformational shift is not priced in,” the analysts said.Bitcoin to reach $90,000 by year-end, $200,000 in 2025The total crypto market cap breached $2.5 trillion as news of the election result became clear, Chhugani noted. Bitcoin hit a new all-time high above $75,000 earlier on election night and is currently trading for $73,815, according to Bitcoin Price Page — up 7% over the past 24 hours. DeFi tokens such as Aave and Uniswap posted double-digit gains, alongside positive pre-market and early trading activity for crypto-related stocks like Coinbase and MicroStrategy on Wednesday.The analysts warned that the market’s initial reaction might be to “sell the news” but suggested any such dip was a buying opportunity for crypto and related stocks, reiterating their call for bitcoin to move closer to $90,000 by the end of this year, and reach a bull cycle target of $200,000 by the end of 2025 under the president-elect.Gautam Chhugani maintains long positions in various cryptocurrencies.