It’s been a break-through week for Crypto bros in many ways. First, the SEC made a massive u-turn and approved the spot ETH ETF and then Donald Trump fully endorsed the crypto space in his speech at the Libertarian Party forum over the weekend. Crypto has broken through to K-street and on top of the obvious positive side-effects, a BTC or an ETH is now becoming a politicized asset. For good and for bad.

Quote of the week:
“I will ensure that the future of crypto and #Bitcoin will be made in the USA…I will support the right to self custody to the nation’s 50 million crypto holders.And I will keep Elizabeth Warren and her goons away from your Bitcoin. And I will never allow the creation of a Central Bank Digital Currency (CBDC).”
Donald Trump

Once an (early stage) asset passes the adoption phase and moves into the ratification phase, the next steps become a lot less pleasant. Trump’s ratification/endorsement of crypto is a clear hint that the digital asset class has grown sufficiently in importance from a wealth perspective to become an important political topic. If you want to win an election, you need the backing of those owning Crypto similar to the dynamics around Real Estate markets- and equity markets.

This is likely going to put a political floor under the price of crypto, but with protection (phase three) ultimately comes regulation (phase 4). Once an asset class is on the “potential bailout list”, governments ultimately want to seek control over it.

So while the endorsement of Crypto is evidently a strong bull-signal short-term, it also risks ruining the whole decentralized foundation upon which it rests. Crypto has broken into K-street. For good and for bad.

Chart 1: Crypto is climbing the evolution ladder