Experts predict crypto regulatory pivot by Joe Biden

The Biden administration may be preparing for a strategic pivot to crypto regulation, potentially aligning more closely with the digital asset community ahead of the upcoming November elections. This speculation follows recent developments indicating possible approval of a spot Ether ETF, a significant change in position from the Securities and Exchange Commission (SEC).

On Thursday, Bloomberg ETF analysts James Seyffart and Eric Balchunas dramatically increased their forecast for the approval of a spot Ether ETF from 25% to 75%, citing sources close to the SEC. The analysts reported a sudden change in sentiment within the SEC, possibly reflecting a broader political recalibration by the Biden administration in response to former President Donald Trump. Trump’s Endorsement of Bitcoin and cryptocurrencies.

This news has sent shockwaves through the financial and crypto markets, with prices of Ethereum and other altcoins soaring by double digits. Notably, the approval process requires the SEC to greenlight both 19b-4s, which entail changes to exchange rules, and S-1s, the registration statements needed to launch ETFs. This step is seen as the first concrete sign of the Biden administration‘s reorientation towards a more crypto-friendly policy framework.

Crypto community speculates on 180 degree U-turn

Following the news, several experts emerged, speculating on a complete reversal of the Biden administration. Haseeb Qureshi, Managing Partner at Dragonfly, declared via X: “I’ve been saying for weeks that Biden will soften crypto politics ahead of the election. He doesn’t want to lose votes in a close race on what is ultimately a minor issue for him. ETF is the first sign of this. I think we will see other agencies weakening in the coming months as well.”

This sentiment suggests a tactical adjustment rather than a complete policy overhaul, aimed at mitigating political risks rather than defending digital currencies.

Sam Lyman, director of public policy at Riot Platforms, highlighted a series of crypto-friendly shifts, including Trump’s open support for digital assets, the SEC’s policy reversal on the Ether ETF, and major legislative developments.

Lyman provided a list of recent wins for the crypto sector, such as the repeal of SAB 121 and the resignation of the FDIC chairman, seen as a result of political pressure from pro-crypto factions.

Jake Chervinsky, Chief Legal Officer at Variant Fund, commented on the potential implications of the ETF approval beyond the market impact. “If the spot ETH ETF is approved, it will be a real shock to everyone I know in DC who is close to this process. That doesn’t mean it won’t happen. It means that approval could signal a major shift in US crypto policy following the SAB 121 vote, perhaps even more important than the ETF itself,” Chervinsky explains.

Vijay Boyapati and Adam Cochran both agreed with Chervinsky. Boyapati, a renowned crypto expert, pointed out the political calculations at play, suggesting that Democrats are recalibrating their position to mitigate electoral losses.

“The SEC’s abrupt reversal on Ethereum ETF approval is purely political. Democrats have seen that their hostility could potentially cost them the election and Biden has likely instructed the SEC to be friendlier, despite the (Senator) Warren wing of the party,” Boyapati noted.

Cochran, partner at CEHV, extensive This signals a broader realization within the Democratic Party that a pro-crypto stance could appeal to a broader voter base, including moderates and independents focused on financial policy.

He noted via X:

Warren had a stranglehold on financial policy among the Democrats. This shows that Democrats in the WH and Senate are starting to realize that this is poisonous to their election chances. (…) This is a major and rapid shift in crypto policy. (…) If that is correct, it is more important than the ETF itself. It could mean that winter is over and it’s time for an American renaissance in crypto!

At the time of writing, ETH was trading at $3,659, up 18% in the last 24 hours.

Ether price
Ether price, 1 week chart | Source: ETHUSD on TradingView.com

Featured image from Medium / Joe Biden, chart from TradingView.com

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