Once a fringe sideshow of the investing public, cryptocurrencies have been a source of concern for policymakers in Washington, D.C., and the subject of ridicule for Wall Street bigwigs.
The widespread acceptance of cryptocurrencies has translated into big gains for investors who have been along the way.
The number of people owning Bitcoin has risen 126% since the beginning of the year as the price of the world’s largest cryptocurrency set new records and soared above $100,000 following the election of Donald Trump. The market capitalization of all cryptocurrencies has swelled by about $1.7 trillion, according to Coinmarketcap.
“Everything is trending in the cryptocurrency industry right now,” Ian Katz, managing partner at Capital Alpha, told Yahoo Finance.
Enthusiasts don’t see the rally ending anytime soon.
This time next year, “we’ll be having the same conversation, where bitcoin has been an incredible success,” Matt Hogan, chief investment officer at Bitwise, told Yahoo Finance. Bitwise predicts that Bitcoin will exceed $200,000 before the end of 2025.
Among Wall Street’s biggest beneficiaries of this shift is BlackRock (Black) CEO Larry Fink was once a “proud skeptic” of Bitcoin. The head of the world’s largest money management company has evolved into one of its most famous advocates.
“I was a proud skeptic, and I studied it, and I learned about it, and I came away saying, ‘Well, you know, my opinion [for] “Five years was wrong,” Fink said He said Earlier this year while discussing his past views with CNBC.
His company, BlackRock, now recommend Interesting investors have put “up to 2%” of their portfolio into Bitcoin.
“We believe that bitcoin is an asset class in itself; it is an alternative to other commodities like gold,” Fink told analysts during an earnings call in October.
Larry Fink, CEO of BlackRock, during an interview with CNBC in 2023. REUTERS/Brendan McDiarmid ·Reuters/Reuters
BlackRock and 10 other money managers such as Fidelity Investments and Franklin Templeton got the green light in January to launch spot bitcoin trading funds, allowing ordinary investors to gain exposure to the world’s largest cryptocurrency without having to own it.
blackrock ETF, Ebitthen it became the fastest growing ETF in history. The 11 ETFs launched had combined $100 billion in assets under management as of December 18, according to JPMorgan research.
“You had people who were going to put their money into bitcoin, but because there wasn’t a reliable, easy, efficient way to do that given their circumstances, they weren’t participating in that,” Robbie Mitchnick, head of digital assets at BlackRock, told Yahoo. finance. “Then ETFs changed that.”
BlackRock’s embrace of cryptocurrencies (it also launched a smaller ETF in late July) coincided with an election year in which pro-crypto congressional candidates received a lot of industry support. Some of the biggest players in the cryptocurrency space – including Coinbase Global (currency), Ripple, and the investment firm Andreessen Horowitz — spent about $135 million via super PACs.
An illustration showing US President-elect Donald Trump holding a bitcoin outside a cryptocurrency exchange is displayed after bitcoin rose to more than $100,000 in Hong Kong. Reuters/Tyrone Siu ·Reuters/Reuters
As a candidate, Trump also presented a number of… Promises To industry. He pledged to fire SEC Chairman Gary Gensler, one of the industry’s biggest opponents. Appointment of a Presidential Cryptocurrency Advisory Council; and creating a “Strategic National Stockpile of Bitcoin” with the help of Congress.
Whether the president-elect will make the US government a holder or even a buyer of Bitcoin remains hotly debated.
But Gensler has already tendered his resignation He notices It will be replaced Famous cryptocurrency lawyer Paul Atkins If it is confirmed. For many years, Atkins has made it clear that he favors clearer regulations for cryptocurrencies that do not stifle innovation or impose unnecessary censorship.
Trump has too He appointed venture capitalist David Sachs To the role of artificial intelligence and the tsar of cryptography. Through his investment firm, Sachs has already backed a number of cryptocurrency and artificial intelligence companies.
US Securities and Exchange Commissioner Paul Atkins, nominee for SEC chairman under Trump, pictured in 2008. REUTERS/Alicia Pierdomenico ·Reuters/Reuters
If these executive branch appointees weren’t enough, the industry is also anxiously awaiting what will easily be the most pro-crypto Congress in history.
“People were shocked by it because we were a new industry, newly influential in Washington,” Nick Carter, partner and co-founder of cryptocurrency venture firm Castle Island Ventures, told Yahoo Finance.
The GOP is expected to push forward pro-crypto legislation that would provide clear regulation for stablecoins and the broader cryptocurrency market, and even give big banks a better way to interact with digital assets.
Carter met with Republicans to discuss the cryptocurrency world’s lack of access to US banking services.
He added: “We have been an industry that has been relentlessly criticized over the past four years, and it is natural that we try to protect our interests.”
The lighting of the Capitol Building in Washington, December 19. (AP Photo/J. Scott Applewhite) ·Associated Press
But many regulated US banks still cannot handle cryptocurrencies, Goldman Sachs CEO David Solomon noted at a recent Reuters conference.
“Everyone is speculating about how this regulatory framework will develop, but it is still unclear how the regulatory framework will develop,” Solomon added.
It is still anyone’s guess how long it might take for the first cryptocurrency legislation to reach the House and Senate and then to Trump.
“I would just caution people, if you think that on January 20, the switch is going to flip, and everything is going to be better and better for bitcoin and the digital asset community, that’s not how Washington works,” said Anthony Scaramucci, a cryptocurrency investor. who worked in the first Trump administration told Yahoo Finance.
Michael Saylor, CEO, MicroStrategy Inc. REUTERS/Marco Bello/File Photo ·Reuters/Reuters
However, these unknowns do not give much time to some cryptocurrency evangelists.
“I’ve said every day for the last four years, ‘Buy bitcoin, don’t sell bitcoin. I’m going to buy more bitcoin,'” Michael Saylor, president of MicroStrategy and a staunch bitcoin supporter, told Yahoo Finance this month.
“I will buy Bitcoin at the top forever.”
Even some of Wall Street’s remaining skeptics admit it would have been smart to jump in early.
“Of course, I wish I bought something that’s trading at 100 times higher than what it was trading at a few years ago, right?” Citadel CEO Ken Griffin said at the NYT DealBook Summit earlier this month.
“We all have FOMO.”
David Hollerith is a senior reporter at Yahoo Finance covering banking, cryptocurrency, and other areas of finance.
