- Tensions between Republicans and Democrats could derail their work on crypto legislation.
- Without new legislation, crypto could struggle to hit all-time highs this year, according to BitWise.
US President Donald Trump has delivered on campaign promises for crypto policy during his first 100 days in office, but recent developments in Congress could stifle industry optimism and prevent crypto from reaching all-time highs this year.
That’s according to a cautionary note released Tuesday by Matt Hougan, chief investment officer for BitWise.
“People often ask me what could derail crypto. My answer is simple: People. More specifically, politicians,” Hougan wrote.
Tensions between Republicans and Democrats are expanding. That may put a full stop to lawmakers’ work on bespoke regulations for the industry, dampening growing enthusiasm from institutional investors that could help drive digital assets to new all-time highs.
“The next few days and weeks will be fraught. If legislation fizzles, this could be a challenging summer for crypto. But if Washington can get its act together, I think the bull market will be unstoppable,” Hougan wrote.
On Tuesday, House Democrats walked out of a scheduled hearing on crypto, citing Republicans’ refusal to consider legislation that would bar President Donald Trump and his family from owning crypto or crypto businesses. Republicans transitioned the official hearing into a roundtable.
On Monday, US Representative Gerry Connolly characterised President Donald Trump’s deep ties to the crypto industry as “open corruption.”
And over the weekend, nine Senate Democrats rescinded their support for the Genius Act, a bill that would regulate stablecoins in the US.
“The change in tune reflects the shifting political environment in Washington,” Hougan explained.
“We realise that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices,” the nine senators wrote in a statement on Saturday.
“However, the bill as it currently stands still has numerous issues that must be addressed.”
Politico reported Republicans were “stunned” by the Democrats’ reversal on the Genius Act, but remain hopeful they can win back their support.
The Democrats are seeking tougher rules around anti-money laundering and foreign issuers, as well as rules that would limit potential risks to the stability of the financial system.
Without at least seven Democrats supporting it, the Genius Act can’t pass a closely divided Senate.
“Politics is messy,” wrote Hougan. “But too often, it’s messier than it needs to be.”
Andrew Flanagan is a markets correspondent for DL News. Have a tip? Reach out to aflanagan@dlnews.com.
