2025 will be a positive but volatile year for cryptocurrencies

With the inauguration of President Trump on January 20, discussions of how a second Trump administration will impact the cryptocurrency sector as well as other emerging sectors such as the burgeoning field of artificial intelligence, continue to dominate business headlines. In the wake of the Crypto Ball organized by David Sachs, the label The first crypto master Given Trump’s mandate, expectations for proactive and future actions are very high. Over the coming days, as the entire Trump team transitions into roles, confirmation hearings continue, and changes at regulatory agencies are finalized, there are several actions that the market seems to expect to happen via executive order.

These include, but are It is not limited to executive orders Addressing Chokepoint 2.0 (the unbundling of the cryptocurrency industry), repealing SAB 121 which would open the doors for banking institutions to hold cryptocurrencies with less complexity and impact on financial statements, and creating a strategic Bitcoin reserve using previously existing Bitcoin. It was seized through the efforts of the US government. All of these Possible actions It has had substantial conversations and debates in US policy circles over the past six (6) months, as Congress effectively voted on a bipartisan basis to repeal SAB 121.

Despite the positive momentum and market sentiment, let’s take a look at why 2025 could be more volatile than some investors and policy advocates expect.

Executive Orders vs. Congress

Expectations that the Trump administration will enact significant changes in cryptocurrency policy, accounting, and reporting via executive order have continued to mount after Election Day. As mentioned above, the market expects the newly appointed Trump team to take swift, comprehensive, and pro-crypto actions within its first few days in office. While these issues and measures are of great interest to cryptocurrency lobbyists, there are a number of larger issues that the administration will need to focus on, all of which have powerful lobbyists and advocates pushing for attention.

Additionally, even while acknowledging that cryptocurrency donations and education have been allocated to both sides of the political spectrum, the reality is that the politicization of almost every topic and issue continues to accelerate. It seems unlikely that the Trump administration’s executive orders will remain in place Without examination or challenge; It is important to remember that Congress and the courts can challenge and invalidate executive orders in certain situations.

Pro-crypto executive orders are sure to come from the White House, but this is just one part of what the cryptocurrency sector needs to achieve long-term stability and successful growth.

Agency hubs may be disappointing

departure Gary Gensler The SEC’s crypto move has been viewed as a positive, with even some hosts on major financial media appearing to share in the excitement over the end of Chairman Gensler’s term. Despite this justified excitement, the path toward comprehensive, pro-growth cryptocurrency regulation remains an uphill endeavor for cryptocurrency investors and enthusiasts. It is important to remember that before his appointment as SEC Chairman, Gary Gensler was viewed by many as a well-educated regulator and crypto supporter. In other words, it is important that cryptocurrency investors and the advocacy community approach the potential for pro-crypto regulation with cautious optimism.

This doesn’t even touch the fact that the IRS, despite the change in sentiment, the White House and Congress, seems unlikely to center its ground and seek tax revenue from cryptocurrency transactions. Given the IRS’s influence on businesses in general, and especially cryptocurrency investors’ desire to use cryptocurrencies as a medium of exchange, investors and policy advocates may be disappointed with the pace of change from a regulatory perspective.

Policy changes take time, and for an industry accustomed to moving quickly, the more steady pace of change can easily turn into frustration.

Cryptocurrencies may not be a priority

Although it is difficult for the cryptocurrency sector and policy advocates to reconcile, there is a reality that cryptocurrencies may not be a priority for the new administration after the wave of actions taken at the beginning of the administration. Despite announcements and expectations of significant action across the board to make the United States more welcoming to crypto assets, including the creation of a Cryptocurrency Advisory Council, politics and international headlines may be putting these elements on the back burner.

In fact, in every conversation held between the Trump transition team and potential Cabinet members, there were almost certainly discussions about how legal and legislative efforts could be used to thwart these efforts. Furthermore, as any entrepreneur and/or investor knows, the geopolitical and economic landscape continues to be more volatile and complex. A Trump White House and Congress will have a lot to deal with, and even with the best intentions, cryptocurrencies may find themselves somewhat marginalized.

Cryptocurrencies have been a priority for discussion and debate during the 2024 election and the lead-up to the 2025 inauguration, and 2025 is set to be a positive year for cryptocurrencies, but it may have more bumps than some forecasters expect.