Experts Predict Joe Biden’s Crypto Regulatory Pivot

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

On Thursday, Bloomberg ETF analysts James Seyffart and Eric Balchunas dramatically increased their forecasts for the approval of a spot Ether ETF from 25% to 75%, citing sources close to the SEC. Analysts have reported a sudden shift in sentiment within the SEC, perhaps reflecting a broader policy recalibration by the Biden administration in response to former President Donald Trump’s support for Bitcoin and cryptocurrencies.

This news sent shockwaves through the financial and crypto markets, with the prices of Ethereum and other altcoins experiencing double-digit surges. Notably, the approval process requires the SEC to give the green light to both 19b-4s, which involves changes to exchange rules, and S-1, the registration statements required to launch ETFs. This move is seen as the first concrete sign of the Biden Administrationthe reorientation towards a political framework more favorable to cryptocurrencies.

The crypto community is speculating about a 180-degree U-turn

Following the news, several experts came forward, hypothesizing a complete turnaround by the Biden administration. Haseeb Qureshi, managing partner of Dragonfly, declared via X: “I’ve been saying for weeks that Biden will soften on cryptocurrencies ahead of the election. He doesn’t want to lose votes in a close race on what is ultimately a minor issue for him. The ETF is the first sign of this: I think we will also see other agencies weaken in the coming months.”.

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

Sam Lyman, Director of Public Policy at Riot Platforms, highlighted a number of pro-crypto changes, including Trump’s explicit support for digital assets, the reversal of SEC policy on the Ether ETF, and important legislative developments .

Lyman provided a list of recent cryptocurrency industry victories, such as the repeal of SAT 121 and the resignation of the FDIC chairman, seen as the result of political pressure from pro-crypto factions.

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

Vijay Boyapati and Adam Cochran both agreed with Chervinsky. Boyapati, a renowned cryptocurrency expert, he underlined the political calculations at play, suggesting that Democrats were recalibrating their position to mitigate electoral losses.

“The SEC’s abrupt about-face on Ethereum ETF approval is blatantly political. Democrats have realized that their hostility could potentially cost them the election, and Biden has likely forced the SEC to be friendlier despite the difficulties. [Senator] The Warren wing of the party,” Boyapati noted.

Cochran, partner of CEHV, enlarged on this, it points to a broader awareness within the Democratic Party that a pro-crypto stance could attract a broader voter base, including moderates and independents focused on financial policies.

He observed via X:

Warren has had stifling control over financial policy under the Democrats. This shows that WH and Senate Democrats are starting to realize that this is toxic to their electoral chances. […] This is a big and rapid change in cryptocurrency policy, […] Whether that is accurate is more important than the ETF itself. It could mean that winter is over and it’s time for a US cryptocurrency renaissance!

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

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

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

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