As 2022 drew to a close the outlook was bleak for the cryptocurrency business.
One of its best know firms, FTX, had collapsed with $8bn (£6.3bn) of customer funds unaccounted for.
In March of 2024, the company’s co-founder Sam Bankman-Fried received a 25-year jail sentence for defrauding customers and investors.
The scandal rattled confidence in the whole sector.
It seemed that cryptocurrencies would remain a niche product, with an enthusiastic but relatively limited following.
But just a few months later and the industry was fizzing with optimism again. Behind the enthusiasm – the success of Donald Trump in the 5 November presidential election.
The feeling was that he would be more favourable to the cryptocurrency sector and, so far, that seems to be the case.
In early December, Trump said he would nominate former Securities and Exchange Commission (SEC) commissioner Paul Atkins to take up the top chairman role at the Wall Street regulator.
Mr Atkins is seen as being far more pro-cryptocurrency than outgoing head, Gary Gensler.
That announcement helped the value of one bitcoin, the biggest of the numerous cryptocurrencies, surge through $100,000.
“With Trump winning you can imagine in 2025 you’ll get proactive regulation. You’ll get removal of some negative regulation, which will then allow banks and other institutions into the space,” says Geoffrey Kendrick, global head of digital assets research at Standard Chartered.
In particular, Mr Kendrick points to a piece of guidance issued by the SEC called SAB 121. Since taking effect in 2022 it has made it difficult for banks and other financial firms to provide cryptocurrency services.
Such a move might help Trump to fulfil his promise made in July to make the US the cryptocurrency capital of the world.
If he makes good on that pledge it would be a remarkable turnaround from 2021 when Trump described Bitcoin as a “scam”.
BBC
