Kalshi’s successful 11^th-hour attempt to legalize “political” event contracts captured the attention of the country and unlocked a multi-billion-dollar prediction marketplace, in a significant loss for the CFTC.  

As betting marketplaces enter into a historic era of deregulation, I expect their popularity will match institutional and retail enthusiasm for other alternative investment categories. I’d put money behind it.

As crypto buries itself deeper in the mainstream, expect to hear more about a new age of digitized finance, DePIN (decentralized physical infrastructure) and tokenization for real-world assets.

Concerns about the environmental impact of blockchain technology will continue to grow, as will worries about whether smaller crypto investors really know what they are getting into.

Crypto companies are feeling more confident about their central argument: that investments written for securities firms do not work well for digital tokens that are designed to run over peer-to-peer networks.

Many of them (and their like-minded allies at US agencies) argue that they are more akin to commodities, like baseball cards, and should be regulated by the Commodity Futures Trading Commission (CFTC).

It is within that commodities watchdog agency that I think we will see more regulatory oversight here.

Expect crypto regulatory reform in the UK. The FCA set out its roadmap for regulatory reform at the end of 2024. It is planning to consult with the private sector on a planned framework for stablecoins and crypto assets in early 2025.

Europe is leading the way with its Markets in Crypto-Assets regulation (MiCA) which will be fully live by the end of 2024.

The Netherlands have approved the launch of a new stablecoin which will be compliant with MiCA. Expect more EU regulators to follow suit and approve new stablecoins in 2025.

My feeling now is that crypto is where the next financial crisis will start.

In the absence of a regulatory threat the crypto eco-system will become even more frothy with investor money funneled into schemes even more outlandish than meme coins that are recommended investments by virtue of “a really tightly-knit community of core investors (obviously purely disinterestedly) promoting it across social media, creating cool memes and building ‘real hype’ around it.” (not making that one up though have anonimized somewhat in order to avoid lawsuits)

NFTs, totally out of favor, are now increasingly looking like a rational proposition in comparison to some of the stuff being flouted at the moment.

But at the moment this matters not at all because we are in a positive feedback cycle.

It is only a question of time, in my view, before investors realise that they are holding an irrationally priced ‘asset’.

And what follows is quite predictable.

But then I expected this to happen last year, and the year before, so in this case having pontificated I throw my hands up.

Your guess is as good as mine!! And “guess” is the key word here.

The crypto boom is set to continue, and even gain further momentum, as Donald Trump sets out his agenda for the future of digital assets.

I believe whatever happens on the regulatory front will make the difference.

Any form or regulation, and its acceptance by the crypto industry, will boost investors’ confidence, and we could see prices skyrocket.

On the flip side, any regulation that strangles the industry could burst the bubble created by Trump’s victory.

The next surge in the extraordinary history of crypto will see a fascinating moment as the new regime in the US seeks to legitimize an industry and a group of asset classes and technologies that many still fail to understand.

Which regulatory agency will be handed the remit to supervise this turf?

In short there will be a few big winners and a lot of big losers as this shakes out in ’25 and beyond.

Sounds a bit like a casino? It pretty much still is!