Crypto gets quick return on US election investment

Crypto keeper. Only an investment as wild as cryptocurrency could turn $200 million into a $1.2 trillion return in a month. President-elect Donald Trump’s nominee to lead the Securities and Exchange Commission, Paul Atkins, helps justify the oversimplistic math using the amount of money the industry’s political action committee splashed around during the 2024 U.S. election cycle to back supportive candidates and the nearly 60% rise in the value of bitcoin and its ilk since the start of November. The risk is that the anticipated lighter enforcement reverses the short-term gains.

Crypto has been on a roll since Trump’s victory. The price of Bitcoin alone is up by some $30,000 since voters cast their ballots on Nov. 5, approaching a whopping $100,000. The total value of decentralized currencies counted by CoinMarketCap soared to $3.6 trillion from $2.4 trillion over the same span. The Atkins choice, unveiled on Wednesday, only adds to the fervor.

If the Senate confirms him, Atkins would in one fell swoop replace a skeptic with an ally. President Joe Biden’s SEC Chair Gary Gensler supported investigations, including of exchange operator Coinbase Global, for alleged violations of existing consumer-protection laws. Atkins opposes this approach, saying a tailored set of rules would be more appropriate. Republicans and some Democrats are drafting them, and if enacted would provide crypto with greater legitimacy.

Any new policy is likely to empower the smaller Commodity Futures Trading Commission to watch over crypto rather than the SEC. A new regime also would align U.S. policing of cryptocurrency more closely with how other countries in Asia and Europe do it, using targeted policy.

Big banks and fund managers await the seal of approval. It would give them greater comfort in backing recently approved exchange-traded funds and other crypto securities. The post-election surge already indicates a sense that bitcoin and others are increasingly becoming a part of the financial firmament. It’s all the more reason that Atkins, despite his laissez-faire philosophy, will have to stay vigilant.

Being left unchecked helped lead to the $32 billion FTX scandal and the imprisonment of the cryptocurrency exchange’s founder and industry evangelist Sam Bankman-Fried. Atkins last worked at the SEC as a commissioner in 2008, leaving just months before the collapse of Lehman Brothers and the global financial crisis that ensued. Lax oversight would similarly endanger crypto’s long-term future.

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President-elect Donald Trump said on Dec. 4 he would nominate Paul Atkins, a former Securities and Exchange Commission member, to be the agency’s chairman.