Experts predict sudden crypto regulation shift by President Biden

Before the election in November, the Biden administration might be getting ready to make a calculated strategic shift in how it views cryptocurrency regulations, possibly bringing itself closer to the community of digital assets.

This conjecture coincides with recent events suggesting that a spot Ether ETF may be approved, a notable shift in the Securities and Exchange Commission's (SEC) position.

Citing sources close to the SEC, Bloomberg ETF analysts James Seyffart and Eric Balchunas raised their prediction for the approval of a spot Ether ETF on Thursday from 25% to 75%.

Following former President Donald Trump's endorsement of Bitcoin and other cryptocurrencies, analysts noted an abrupt shift in the SEC's stance, which may indicate a larger political reassessment by the Biden administration.

The news has caused tremors in the financial and cryptocurrency markets, resulting in double-digit increases in the prices of Ethereum and other altcoins.

Notably, in order for ETFs to launch, the SEC must approve 19b-4s, which involve changes to exchange rules, and S-1s, which are registration statements. This action is viewed as the Biden administration's first noticeable shift in direction toward a more crypto-friendly legislative framework.

Crypto community conjectures 180-degree u-turn

A number of experts expressed their opinions after the news broke, speculating that the Biden administration would completely reverse course. Dragonfly Managing Partner Haseeb Qureshi said via X that he has been predicting for weeks that Biden will soften his stance on cryptocurrencies before the election.

In the end, he believes the issue is insignificant, but he doesn't want to lose votes in a close race. The first indication of this is the ETF; in the coming months, I believe other agencies will start to soften as well.

This opinion points to a tactical rather than a comprehensive policy change, with the goal of reducing political risks as opposed to promoting digital currencies.

Riot Platforms' Director of Public Policy, Sam Lyman, outlined several developments that are favorable to the cryptocurrency space, such as President Trump's open endorsement of digital assets, the SEC's policy reversal regarding the Ether ETF, and noteworthy legislative advancements.

Lyman listed a number of recent successes for the cryptocurrency industry, including the removal of SAB 121 and the FDIC Chair's resignation, both of which were attributed to political pressure from groups that support cryptocurrencies.

Chief Legal Officer at Variant Fund Jake Chervinsky offered insights on possible ramifications of the ETF approval that go beyond its effect on the market. Everyone I know in Washington, DC, who is involved in this process will be completely shocked if the spot ETH ETF is approved. It doesn't follow that it won't occur.

After the SAB 121 vote, approval could indicate a significant change in US cryptocurrency policy, possibly even more significant than the ETF itself, according to Chervinsky.

Adam Cochran and Vijay Boyapati both concurred with Chervinsky. Renowned crypto expert Boyapati highlighted the political maneuvering going on, implying that the Democrats were adjusting their position in an attempt to offset electoral setbacks.

The abrupt about-face by the SEC on the Ethereum ETF approval is nakedly political. The Democrats have seen that their hostility could potentially cost them the election and Biden likely commandeered the SEC to be more friendly despite the [Senator] Warren wing of the party

Vijay Boyapati

Cochran, a partner at CEHV, elaborated on this, suggesting that the Democratic Party is realizing that a pro-crypto stance could win over more voters, including independents and moderates who are interested in financial issues.

Through X, he said that under the Democrats, Warren controlled financial policy with an iron grip, indicating that Senate Democrats and the White House are beginning to recognize this as detrimental to their chances of winning the election.

This, he noted, represents a significant and rapid change in crypto policy, which matters more than the ETF itself and might signal the end of crypto winter and the beginning of a US crypto comeback.

ETH was up 18% over the previous day at $3,659 at the time of publication.