Articles
Crypto’s strong signal amid macro noise: The setup for this asset class might be the strongest it’s ever been
TL;DR
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Markets are struggling with rising economic and geopolitical risks, but crypto fundamentals are experiencing the opposite, creating a unique investment opportunity.
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President Trump has appointed crypto-friendly leaders to key regulatory agencies, including the SEC and CFTC, signaling a major shift from enforcement-driven regulation.
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The SEC dropped investigations into major crypto firms and repealed restrictive policies, while new working groups are shaping a clear regulatory framework for digital assets.
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A new Strategic Bitcoin Reserve has been established, with 200,000 BTC designated as a national reserve, reinforcing crypto’s role in US financial strategy.
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While macro uncertainty weighs on prices, the current environment is setting the stage for what could be the most significant long-term investment opportunity in crypto history.
The past several weeks have offered little encouragement to investors worldwide. Rising uncertainty surrounds the potential escalation of a tariff war between the US and its trading partners, compounded by sweeping changes in the US government’s structure following the establishment of the Department of Government Efficiency. Revised US GDP forecasts now signal a renewed risk of an imminent recession, while ongoing conflicts in Ukraine and the Middle East—now stretching across years—leave markets guessing whether further escalation or cooling tensions, perhaps through ceasefires, might finally pave the way for peace in these regions.
As this unfolds, risk assets have been experiencing nonnegligible corrections from their recently attained all-time highs. The S&P 500 has shed 10% since its mid-February peak, while the Nasdaq 100 has followed with a steeper 14% drop over the same period. Standouts from the “Magnificent 7,” like NVDA, have seen corrections as severe as 30% from their early January highs. Meanwhile, the Nasdaq Crypto IndexTM (NCITM)—our preferred benchmark for crypto assets—has once again displayed its typical high-beta volatility in times of fear, tumbling as much as 35% from mid-January peaks. In the opposite direction, gold remains perceived as a safe haven in times of uncertainty, recently surpassing $3,000 an ounce for the first time in history and returning 15% since the beginning of 2025.
This backdrop unfolds as President Trump navigates the first 100 days of his second term, blending decisive actions with a flurry of contradictory statements that amplify noise and generate fear among market participants. For those who tracked Trump’s first term, trade wars and firm rhetoric are not unfamiliar.
Ironically, while economic and geopolitical risks appear to be growing exponentially as market participants navigate the uncertainties surrounding Trump’s strategy, the crypto space is experiencing the opposite trend—uncertainties are diminishing, and they are doing so rapidly and significantly. This stark dichotomy—strong signals for crypto emerging amid macro turmoil—presents a compelling opportunity for long-term investors.
Economic and geopolitical risks are rising from a relatively low base, while crypto market risks are declining from a much higher one. These are two opposing forces at play. Markets, those wild and unpredictable creatures, sometimes create exactly this kind of asymmetry—offering, from time to time, disproportionate opportunities.
So the bigger picture is: the prospect of US regulatory clarity will drive unprecedented confidence and institutional adoption in the crypto space in the years ahead. In the following sections, we explain why.
The White House and US regulators are now pro-crypto
Since his election on November 5, 2024, President Trump has nominated known outspoken advocates for digital assets to lead key agencies and working groups on US federal level. Long-time crypto investor David Sacks was appointed as White House’s AI & Crypto Czar, leading the President’s Working Group on Digital Asset Markets created by an executive order on January 23. Trump also nominated Paul Atkins as the next SEC Chairman, and Brian Quintenz as the next CFTC Chairman, both of which have traditionally been pro-crypto and against the “regulation by enforcement” stance that marked previous US administrations. On the SEC in particular, even prior to Atkins inauguration, a dedicated Crypto Task Force was instituted, with Hester Peirce, SEC Commissioner since 2018 and a known pro-crypto advocate. These movements clearly show that a new pro-crypto alliance comprising the White House and federal regulatory agencies is now in place, with great prospects for crypto regulation to advance significantly in the new administration.
New working groups are ready to tackle existing regulatory issues
The President’s Working Group has a definite timeline to deliver reports addressing crypto market structure, stablecoins, and blockchain innovation in the US. Peirce, as outlined in her February 4 letter “The Journey Begins,” has already proposed key points to be tackled by the Task Force she’s now leading, which include (i) clarifying the legal status of different types of crypto assets, (ii) defining clear jurisdictions regarding digital assets for the SEC and the CFTC, (iii) providing clear rules for the registration of digital tokens, (iv) updating existing rules for crypto ETPs to support staking and in-kind creations and redemption, and (v) establishing best practices for tokenization and blockchain integration in capital markets. While Peirce highlights that it will surely take time for all of this to be turned into concrete regulatory proposals, these early developments are nothing short of remarkable, showing not just intent, but a well-defined plan of newly-nominated incumbents to advance crypto regulation and foster innovation in the years to come.
Restrictive rules revoked and investigations on crypto companies dropped by the SEC
The SEC has eliminated restrictive rules like SAB 121, while the Office of the Comptroller of the Currency (OCC) now permits banks to hold cryptocurrencies and offer custody services, treating digital assets as standard banking tools. The SEC has also ended investigations and open lawsuits against major crypto companies in the US without penalties, a list which includes centralized exchanges Robinhood, Coinbase, Gemini and Kraken, as well as other companies developing key protocols and crypto infrastructure, including OpenSea, Uniswap Labs, Consensys and Yuga Labs.
This rollback lifts a significant burden from firms previously targeted over securities and compliance issues, suggesting the end of the “regulation by enforcement” stance seen in the past several years and that Operation Choke Point 2.0 is now behind us. The cessation of these probes liberates the sector to focus on innovation, sending a strong message that the new administration values progress and welcomes crypto in the US.
Strategic bitcoin reserve and digital asset stockpile
On March 6, Trump signed yet another executive order establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile. This initiative designates approximately 200,000 bitcoin from forfeitures as a national reserve, termed “digital gold,” with a no-sell policy. The stockpile includes tokens other than bitcoin, consolidating seized assets into a strategic portfolio at federal level, and showcasing the understanding that crypto is a lot more than just bitcoin. This pioneering move decisively elevates digital assets to the status of sovereign reserves, and reinforces the new administration’s plan to make the US the “crypto capital of the world.”
Crypto’s biggest pricing moment as the largest capital markets open for business
By separating recent noise from signal, it’s clear that the first two months of the “Trump Effect” are offering a strikingly encouraging outlook for digital assets as we progress in 2025 and beyond, even if near-term prices are not reflecting this positive outlook.
This convergence of intent, action, and strategic vision not only signals the end of years of regulatory ambiguity in America but also positions the current moment potentially as the most significant pricing opportunity for crypto to date, offering long-term investors a rare chance to capitalize on the cusp of institutional adoption and mainstream acceptance in the years ahead.
Benjamin Graham famously said that “In the short run, the market is a voting machine but in the long run, it is a weighing machine.” As post-election noise and macro uncertainty dissipate, the scales are tipping decisively toward crypto’s heavyweight future, with the world’s largest capital markets playing a key role in making blockchain technology ubiquitous.
The combination of (i) future prospects for the industry improving by a lot and (ii) depressed prices in the short term due to temporary macro turmoil is one of those rare moments that markets give us from time to time. From the same Benjamin Graham, “Mr. Market is there to serve you, not guide you.”
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