“Hell Has Frozen Over:’’ How US Politics And Donald Trump Sparked A Historic Breakthrough For Crypto Amid Ethereum ETF Approvals

It
was
a
seismic
week
for
crypto
in
the
US,
with
two
massive
victories
for
the
industry
coming
via
the
quick-fire
approval
of
spot
Ethereum
ETFs
and
the
progress
of
a
bill
designed
to
provide
a
clear
regulatory
framework.

The
former
had
seemed
impossible
just
a
week
ago,
with
Bloomberg
ETF
analysts
putting
the
odds
of
ETH
ETF
approvals
at
”slim
to
none.”

The
approval
of
The
Financial
Innovation
and
Technology
for
the
21st
Century
Act
(FIT21)
by
the
US
House
of
Representatives
on
May
22
was
another
huge
breakthrough,
made
possible
only
by
71
Democrats
crossing
party
lines
to
join
Republicans
in
voting
for
its
approval.
It
was
the
first
time
a
major
crypto-related
bill
has
cleared
one
of
the
chambers
of
Congress.

The
”sudden
reversal
in
regulatory
sentiment”
earlier
this
week
came
after
”months
of
stalled
conversations,”
said
JPMorgan
analysts.
And
then,
out
of
the
blue,
the
Securities
and
Exchange
Commission
(SEC)
was
not
only
re-engaging
with
fund
managers
eager
to
launch
Ethereum
ETFs,
but
actually
fast
tracking
the
approvals
process.

Ripple
Labs
CEO
Brad
Garlinghouse
was
so
gobsmacked
by
the
developments
that
he
posted
on
X
that
it
”Feels
like
hell
has
frozen
over!!”

Big
momentum
in
crypto
this
week
–
ETH
ETF
passed
and
bipartisan
support
on
crypto
legislation…

Feels
like
hell
has
frozen
over!!
????

https://t.co/70T0qLt1FH

—
Brad
Garlinghouse
(@bgarlinghouse)

May
24,
2024

Ethereum
ETF
Approvals
Not
The
Most
Important
Thing

So,
what
changed?
The
answer
seems
to
be
simple:
politics.

“The
most
important
things
here
isn’t
the
ETF,”
said
Adam
Cochrane,
a
partner
at
venture
capital
firm
Cinneamhain
Ventures,
in
a
May
23
X

post
on
X.
”It’s:
Total
change
in
stance
by
admin,
that
forces
Gensler
to
concede.”

The
root
of
that
change
was
seemingly
Donald
Trump’s
unexpected
grab
for
the
crypto
vote
in
the
upcoming
presidential
election.
The
man
who
once
called
Bitcoin
”a
scam”
had
become
not
only
”fine
with
it,”
but
even
willing
to

accept
donations
in
crypto
for
his
campaign
to
oust
President
Joe
Biden.

The
shift
was
part
of
a
move
to
build
a
”crypto
army”
to
counter
the
”anti-crypto
army”
led
by
Biden’s
”official
surrogate
[Senator]
Elizabeth
Warren,”
according
to
a
campaign
statement.

“If
you’re
in
favor
of
crypto,
you
better
vote
for
Trump,”
said
the
former
president.

BREAKING:
????????
Donald
Trump
now
officially
accepts

#Bitcoin
for
campaign
donations.

pic.twitter.com/ySkwNQT1D2

—
Bitcoin
Magazine
(@BitcoinMagazine)

May
21,
2024

Trump
had
thrown
down
the
gauntlet
to
a
Democratic
party
that
Cardano
founder
Charles
Hoskinson
had
accused
of
”a
coordinated
effort
to
kill
crypto.”

Electric
Capital
co-founder
Avichal
Garg

warned
that
Biden
clinging
to
his
anti-crypto
stance
would
see
the
digital
asset
voter
community
move
“from
Anti-Gensler
to
Anti-Biden
to
anti-Democrats.”

Without
warning,
crypto
had
made
an
unexpected
debut
as
an
issue
in
a
presidential
election.

The
response
from
the
Democrats
is
what
crypto
industry
entrepreneurs
have
dreamed
of
for
years.
The
SEC,
long
the
industry’s
bane
with
its
regulation-by-enforcement
strategy,
began
rolling
out
the
red
carpet
early
this
week
for
fund
managers
from
BlackRock
to
Fidelity
that
had
applied
to
launch
Ethereum
ETFs.
And,
within
just
a
few
days,
they
were
approved.

What
Comes
Next?

Wider
mainstream
adoption,
greater
regulatory
clarity,
and
possibly
even
the
reinvigoration
of
the
US
crypto
industry.

Standard
Chartered
analyst
Geoffrey
Kendrick
sees
the
week’s
developments
as
a
”watershed
moment”
for
crypto
and
told
The
Block
that
Solana
ETFs
and
XRP
ETFs
are
likely
to
follow
Bitcoin
and
Ethereum
by
gaining
regulatory
approval
in
2025.

“The
core
technology
is
so
similar
to
ETH
it
would
be
difficult
for
the
SEC
to
claim
they
were
securities
given
the
ETH
position,”
he
said.
“The
crypto
industry
now
seems
to
have
political
backing
on
both
sides
of
the
aisle.”

Fund
manager
VanEck
agrees.
Head
of
digital
assets
research
Matthew
Sigel

posted
on
X
that
the
improved
political
backdrop
”will
lead
to
further
victories
for
digital
asset
investors
and
developers,
via
new
laws
and
in
the
courts,
that
draw
investment
to
bitcoin,
ethereum
and
other
open-source
blockchain
software.”

We
are
so
thrilled
to
confirm
that
the
SEC
has
approved,
pursuant
to
Section
19(b)
of
the
Securities
Exchange
Act
of
1934,
our
exchange
partner
CBOE’s
proposed
rule
change
to
list
and
trade
a

@vaneck_us
spot

#Ethereum
ETF
on
the
CBOE!
????????

TLDR:
We
expect
the
improved
political…

pic.twitter.com/o6ZbFWKExi

—
matthew
sigel,
recovering
CFA
(@matthew_sigel)

May
23,
2024

Greater
regulatory
clarity
looks
likely
now,
too,
with
the
possibility
that
the
more
crypto-friendly
Commodity
Futures
Trading
Commission
(CFTC)
gains
a
bigger
role
in
overseeing
the
industry.
The
SEC
has
now
de
facto
conceded
that
Ethereum
is
not
a
security,
while
the
passage
into
law
of
FIT21
would
give
the
CFTC
more
power
and
funding
to
oversee
digital
commodities.

In
short,
the
US
crypto
industry
finds
itself
in
a
sweet
spot
after
a
week
that
delivered
it
a
huge
shot
in
the
arm.
It
now
seems
a
long
time
ago
that
prominent
crypto
figures
were
warning
of
the
danger
that
the
industry
shifts
out
of
the
US
because
of
its
hostile
regulatory
regime.

Said
Trump, “If
crypto
is
moving
out
of
the
U.S.
because
of
hostility
toward
crypto…
well,
we’ll
stop
it.”

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