How A Crypto Czar Will Impact U.S. Investors #CriptoNews

With David Sacks having been appointed as Crypto and AI Strategist, and garnering the informal title of Crypto and AI czar, crypto investors and advocates would be well served in asking just how such an appointment will effect the sector in 2025. Clearly the crypto market has responded positively to the election of President-Elect Trump with bitcoin rallying over 40% since the election results were confirmed. Given that Sacks has a multi-decade track record as an angel investor in technology firms, as well as having served as the COO of PayPal, this appointment has been viewed with measured optimism by the crypto marketplace. As the ramifications of the first ever pro-crypto Congress, as well as the multiple pledges made by the Trump campaign to crypto investors, begin to translate from concept to reality it seems worth taking a closer look at what this news might mean.

Important caveats that should be noted, regardless of how this role eventually evolves over time, include but are not limited to the following. First, even though Sack’s appointment has been received positively in a recent run of positive headlines, his role is an advisory one. Specifically it is speculated that the majority of Sack’s efforts will involve working with Congress on crypto and AI issues. Second Sack’s relative lack of experience in the public sector, as well as the questions around potential conflicts of interest might distract from more sector-specific work. Reporting has noted that the appointment is one as a special government employee expected to work approximately 130 days a year.

That said, the creation of this position and appointment of Sack’s is work examining more closely, particularly in how it will drive change in the crypto sector.

Campaign Pledges To Be Kept

The creation of this position is sending a clear message to markets; campaign promises and pledges made by the Trump campaign and transition team have a higher likelihood of being fulfilled. One such pledge that has generated significant headlines and discussions is the creation of a strategic bitcoin reserve, which although simple sounding at a high level does come with a unique set of pros and cons. Another pledge, focusing on the removal of chair Gensler from the SEC, has already occurred since Gensler announced he will be resigning in January 2025.

Other promises and pledges, including a statement about making the U.S. the world’s crypto capital, will need persistent advocacy and efforts at every level of government to become reality. Another statement related to the elimination of capital gains on bitcoin transactions; this action would require Congress to modify the tax code to effectuate a permanent change. Lastly, promises centered around the creation of a crypto advisory council, opposition to the U.S. CBDC, and reorienting the policy landscape to one more supportive of crypto will also require persistent support and advocacy at the federal level.

With the appointment of Sack’s this means at the very least that crypto will have an advisor and advocate at the higher level of government to help ensure pledges and promises are kept.

U.S. Regulators Will Have A Lighter Hand

One of the most obvious policy changes that will be enacted by the incoming Trump administration is that the regulatory overhang and headwind that has been an obstacle for crypto entrepreneurs will be significantly addressed. These headwinds might be seen by some market analysts as the usual gripes that virtually every industry has when regulations do not exactly according to plan, but two recent events demonstrate how substantial these anti-crypto policies have been.

Recent document releases indicate that the Biden Administration’s FDIC sent multiple letters to U.S. banks calling on them to pause all crypto related activity. While not specifically ordering the FDIC to instruct banks to avoid crypto activity and clients the implications of these letters are clear, especially given the allegations leveled by former Silvergate executives such as Chris Lane. Additionally, serial entrepreneur and venture capitalist Marc Andressen added fuel to this debate via comments alleging that crypto entrepreneurs and start-ups had been systematically de-banked under the Biden Administration.

Given the campaign contributions (the crypto lobby contributed nearly $200 million to the current election cycle) and the pro-crypto appointments that have been announced, such regulatory headwinds look set to shift to tailwinds.

Crypto Dollars

In light of bitcoin’s dramatic run-up in price since November, the speculation around strategic bitcoin reserves, and the campaign pledge to fight against a U.S. CBDC the prospect of crypto dollars might seem like a remote one. That said, taking a closer look at the effect that a pro-crypto regulatory and executive regime will have reveals a different story. Specifically there are several trends and developments that have already begun that could – in a straightforward manner – help lead to a crypto or tokenized dollar. U.S. treasuries are already being tokenized in the billions of dollars, virtually every major U.S. TradFi institution has deployed blockchain and/or tokenized solutions, and payment processors (including credit card firms) are embracing tokenized payments. In any event the pro-crypto environment that looks set to dominate U.S. crypto conversations will – almost inevitably – also help lead to the tokenization of the dollar or even a crypto dollar.

A crypto czar will not solve all of the problems facing the crypto sector, but will definitely help foster innovation and growth; 2025 will be an exciting year for investors and advocates alike.