FX.co ★ JP Morgan foresees changes in crypto market under Trump’s presidency

The crypto market is in turmoil again. Analysts at JP Morgan, led by Managing Director Nikolaos Panigirtzoglou, came up with revised forecasts. They suggest a new plausible scenario on the grounds of updates to the legislative framework.

JP Morgan anticipates the adoption of three key bills: 1. The Financial Innovation and Technology for the 21st Century Act, which will define the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC); 2. The Clarity for Payment Stablecoins Act 2023, aimed at establishing a legal framework for stablecoins; and 3. The Central Bank Digital Currency Anti-Surveillance State Act, which could halt the development of a government digital currency.

Another fundamental for the change in the market is the relaxation of regulations. JP Morgan believes that the Securities and Exchange Commission will soften its rhetoric and shift to a more constructive dialogue with the market. Lawsuits against companies like Coinbase may be settled or dismissed, along with claims against platforms like Robinhood and Uniswap.

The third very significant change for the crypto sector will be the repeal of SAB 121, a directive restricting banks from holding digital assets. Its removal would give American financial institutions more freedom to actively engage in the crypto market.

The fourth anticipated shift involves the approval of new spot exchange-traded funds (ETFs) for XRP, Solana, and others. The fifth change highlights increased venture funding activity, as emphasized by JP Morgan. Finally, the sixth anticipated change will be brought by closer collaboration with regulators on token issuance and decentralized autonomous organizations (DAOs).

Despite these potential developments, JP Morgan analysts remain cautious about Bitcoin. They believe BTC is unlikely to be included in the US strategic financial reserves, as the new administration is expected to give priority to other issues.

Previously, the financial institution mentioned that the so-called "Plan 21/21" could contribute to Bitcoin’s uptrend. This initiative, proposed by the largest Bitcoin institutional holder MicroStrategy, remains in question.