The Biden Administration Is Easing Up on Crypto

The Biden administration’s stance on crypto appears to be softening. I feel comfortable saying this, despite the yearslong “whole-of-government” onslaught against the industry, due to a few key advancements in recent weeks.

First, and perhaps most significantly, Monday’s news that the U.S. Securities and Exchange Commission (SEC) may be gearing up to approve spot ether exchange-traded funds (ETFs). This would be a major reversal in fortune for an asset class assumed to be dead-on-arrival, especially considering the securities watchdog has recently been probing prominent Ethereum-related institutions.

While much of this is just speculation, based partially on words heard through the grapevine (i.e. “sources with direct knowledge of the situation”), it is telling that the SEC has asked for amended filings from prospect ETH ETF exchanges on an expedited basis. It would be an odd move if the agency planned to reject these applications outright.

Just yesterday, Bloomberg Intelligence placed the odds of an SEC approval of spot ETH ETFs at 25%. Today, it stands at 75% likely that these products – which would likely draw institutional capital into the second-largest crypto asset by market cap, in the same way bitcoin benefited from its own cluster of ETFs – will launch this year. (The SEC is expected to make a decision on VanEck’s spot ether ETF on May 23.)

Secondly, last week a bipartisan bill called the Deploying American Blockchains Act of 2023 was passed with a margin of 334 to 79 by House representatives. While modest in scope, the bill would enable the Secretary of Commerce, currently Gina Raimondo, “to take actions necessary and appropriate to promote the competitiveness of the United States” in the blockchain industry.