By Stephen McBride
Compiled by: Vernacular Blockchain
Source: TradingView
1. The crypto market is at a critical turning point
Bitcoin (BTC) has stagnated after breaking above $100,000, while many small-cap cryptocurrencies have given back their post-election gains.
However, we are on the verge of an unprecedented change in the history of cryptocurrency - government support, which is something the market has long desired.
Relevant research shows that this will become a strong driving force for a new round of cryptocurrency price increases, and may even break the long-standing four-year cycle.
Washington’s U-turn has transformed cryptocurrencies from “de facto illegal” to “national priority.” Over the past month, we’ve witnessed an almost overwhelming series of positive regulatory changes:
- Trump signed an executive order laying the groundwork for a pro-crypto regulatory environment, ending Operation Choke Point 2.0 and ensuring cryptocurrency companies have access to banking services.
- The U.S. Securities and Exchange Commission (SEC) announced the establishment of a special working group to develop new regulatory rules to clarify which tokens are securities and which are commodities.
- The SEC repealed Rule 121, an obscure rule that had previously made it nearly impossible for banks to custody cryptocurrencies for their clients.
- The Commodity Futures Trading Commission (CFTC) will be led by cryptocurrency proponent Brian Quintenz, further promoting a regulatory environment that is favorable to the industry.
- Congress is expected to pass a stablecoin bill this year to provide a legal framework for the stablecoin market.
- David Sacks, Trump's crypto policy chief, said the administration wants to make the United States the "cryptocurrency capital of the world."
- A Texas judge has overturned sanctions on privacy protocol Tornado Cash, marking a major shift toward regulators becoming friendlier to innovation.
These positive regulatory changes are so numerous that the policy shifts in the past month alone could fill several pages!
2. Regulatory clarity is a green light for Wall Street
The world's largest pool of funds can finally enter the crypto market in a big way.
Case in point: When asked last month whether Bank of America would get into the crypto business, CEO Brian Moynihan responded: “If the regulatory framework is in place and it becomes a truly legitimate area in which to do business, you’ll see the entire banking system jumping in.”
Now, Wall Street can finally invest with confidence, and entrepreneurs can finally build with confidence. As investors, we will also seize opportunities in this major change and continue to hold the highest quality crypto assets.
Most investors do not realize how badly the regulatory storm has hit the crypto market in the past few years, and now they underestimate the far-reaching impact of this round of policy shifts on the future of the crypto market.
The US government is moving from an anti-encryption stance to a pro-encryption stance. For the past four years, every time we talked about encryption regulation, it was bad news - "Oh, great, another three-letter agency sued a certain protocol." Now, the situation has completely reversed.
The most important catalyst in crypto history is about to arrive as market sentiment hits multi-year lows. The Memecoin craze is about to end, and crypto innovation in the United States will usher in a real boom. The regulatory floodgates have been opened, and Wall Street giants will soon step into this new world.
3. Capital flows are the key reason why Bitcoin still leads this bull market
Since BlackRock launched the iShares Bitcoin Trust ETF (IBIT), the ETF has attracted $40 billion in funds in just one year.
In contrast, small cryptocurrencies lack such capital flow support, and their market performance is almost entirely maintained by sporadic retail buying, with most investors only buying small amounts of a few hundred dollars.
In the past few years, crypto funds that once dominated the market have been struggling to raise new funds due to regulatory resistance, resulting in few people willing to buy even small cryptocurrencies with strong fundamentals. But as the regulatory environment gradually becomes clearer, this situation is changing.
I understand that dozens of crypto funds are actively raising funds, and their goal is to complete the fundraising this quarter, which means that by early summer this year, the market may usher in a new wave of funds.
I also think that regulatory clarity has the potential to break the traditional four-year cycle—and in a positive direction.
Since the crypto market bottomed out in late 2022, Bitcoin has been the market leader.
Judging from the past four-year cycle, capital flows should have begun to flow into small tokens at this stage, but this time, they are still waiting for opportunities.
Normally, the market would see a deep correction in 2026, but Washington’s U-turn on cryptocurrency policy could make this cycle last longer.
ETFs have already brought tens of billions of dollars in new funds to the crypto market, and Washington’s policy shift has the potential to bring in “trillion-level” inflows.
Our research shows that the actual progress of the current market cycle is earlier than the calendar indicates.
By 2025, the price of Bitcoin could soar to $250,000.
However, most investors are still looking back, troubled by the shadow of years of regulatory storms, and have not yet realized that the United States is about to become the center of global cryptocurrency innovation!
4. As the regulatory environment changes, truly valuable crypto projects are about to explode
In the past few years, due to poor regulation, a large amount of funds have been blocked from the crypto market, resulting in most projects not getting a real chance to develop. Now, the situation is changing.
While 99% of cryptocurrencies still lack long-term value… the 1% of high-quality projects are solving real problems in innovative ways and have already begun to make profits.
I just did some in-depth research and found three innovative crypto projects with potential:
- One of them is challenging Google's industry dominance.
- Another one created an "AI chip version of Airbnb."
- The third one has partnered with well-known brands such as Disney, Netflix, HBO, Apple, and Nike.
The regulatory gates have been opened, and the real value investment opportunity has arrived!
