Bernstein Predicts the Formation of Crypto-Friendly SEC and Senate Banking Committee Under Trump

The report suggests that following the U.S. elections, a more crypto-friendly Securities and Exchange Commission (SEC) and Senate Banking Committee are anticipated to be established.

Bernstein has indicated that there is now an expectation for quicker progress in developing legislation concerning stablecoins and market structure.

The brokerage firm anticipates a reassessment of a broader range of crypto assets.

The outcome of the U.S. elections is expected to enhance the transparency of digital asset regulation, as the SEC and Senate Banking Committee are likely to become more favorable towards crypto after Donald Trump's victory in the presidential race and the Republican Party gaining control of the Senate, Bernstein noted in their research report on Thursday.

"We foresee a new regime for crypto rule-making," stated the brokerage, adding that this "transformational shift is not yet priced in."

Bernstein noted that faster progress is expected for bills related to both stablecoins and market structure. This is a positive development for stablecoin issuers like Circle and Paxos, as well as major U.S. crypto companies and brokers/dealers.

Bernstein highlighted that the SEC is involved in litigation with key players in the crypto industry, including Coinbase (COIN), Robinhood (HOOD), and Binance, as well as decentralized finance (DeFi) companies and stablecoins.

"In the medium term, we anticipate clarity in the definition of digital assets and securities, as well as a progressive framework for registering digital asset securities with the SEC," wrote analysts led by Gautam Chhugani.

The brokerage firm stated that it expects a reevaluation of broader crypto assets that have suffered from the lack of clarity regarding whether they qualify as securities. They anticipate that asset managers will introduce more exchange-traded fund (ETF) products based on various cryptocurrency tokens.

The report also mentions that positive actions are anticipated towards the establishment of a national Bitcoin reserve in line with Trump's campaign promise, and there will be increased focus on the growth of mining in the U.S.