For years, the biggest thing holding crypto back wasn’t the tech or the vision, but a thick wall of regulatory uncertainty.
The lack of clear rules in America pushed money toward speculative bets instead of funding real, world-changing businesses.
It fenced American investors out of countless opportunities.
And it held back the flood of institutional capital waiting on the sidelines.
But that era is over. Crypto won its regulatory war.
This past month saw the passage of the first piece of crypto legislation. More important, the SEC is no longer fighting crypto—it’s laying the groundwork for it to thrive.
This changes everything.
In today’s article, I’ll explain what these new crypto laws are… how Wall Street is responding… and what it means for us as investors.
- Let’s start with the two most important pieces of crypto legislation…
First up is the GENIUS Act, which was signed into law a few weeks ago.
I’ve said for years now that stablecoins are crypto’s first killer use case. There’s now $270 billion worth of stablecoins in circulation.
This is even more remarkable when you consider they existed in a weird regulatory grey area in America, the home of finance.
Source: DefiLlama
The GENIUS Act gives America its first real stablecoin framework. This is the catalyst to propel stablecoin volumes to $1 trillion over the next year.
This bill unlocks the next wave of growth for crypto. It will finally allow banks, payment networks, and institutional players to adopt crypto at scale.
But an all-important question still needs to be answered: “Which tokens are securities, and which are commodities?”
That’s where the CLARITY Act comes in.
CLARITY draws a line. If a token is decentralized—like Ethereum (ETH), for example—it’s a commodity. If not, it’s a security.
It also gives early-stage token projects three years to decentralize before getting swept into SEC enforcement.
- Alongside the CLARITY Act, the SEC just launched “Project Crypto.”
Regulatory agencies often drag their feet even after laws pass. That’s been the story in industries like nuclear energy and drones.
Not this time.
“Project Crypto” is the most bullish regulatory shift we’ve ever seen. It makes three important changes:
#1: Almost all tokens are not securities
This shift allows projects to be more transparent about revenue and token mechanics without regulatory fear. It allows crypto businesses to share revenues with users. No more pretending tokens have no value.
Lastly, it gives crypto startups 2–3 years to launch and iterate before facing heavy regulation.
#2: Token launches are now legal in the US
US-based startups can finally issue tokens without going through weird offshore structures. It also allows American investors to participate in ICOs.
#3: Self custody = core American right
This is a clear rebuke to the old Operation Choke Point crackdown on wallets. The new SEC says you have the right to bear crypto.
For years, hostile regulators’ war on crypto made this asset class toxic for Wall Street. Now, it has the green light to move in… and Wall Street’s appetite for crypto is massive.
For proof, look no further than the bitcoin (BTC) and Ethereum ETFs.
Bitcoin ETFs have already absorbed billions and are poised to overtake gold ETFs within the next 12 months.
Assets held in the largest ETH ETF—the iShares Ethereum Trust ETF (ETHA)—have also tripled to $10 billion since the start of June.
It’s now the third-fastest ETF to reach $10 billion in assets behind, you guessed it… two BTC ETFs.
- My research suggestions Wall Street’s march into crypto will follow a similar trajectory to our own.
When I first invested in crypto, I bought BTC. Then I graduated to ETH before buying some smaller tokens. You likely followed a similar path. So too will Wall Street.
Today, it’s piling into BTC and ETH. Next, money will flow into the great crypto businesses building real products.
And remember, crypto markets are tiny. Just one stock, Nvidia (NVDA), is worth more than all cryptos combined. When big money players come marching in, it’ll be like trying to fit the Hoover Dam through a garden hose.
“Pro investors” will also change how crypto markets work.
BTC has more than doubled since the first ETFs launched in January 2024. If you look at a chart of BTC, it’s up with much less volatility and no gut-wrenching drawdowns. You could almost divide bitcoin’s history into two eras: BE and AE. Before ETFs and After ETFs.
The same thing is now happening for Ethereum.
Until recently, crypto markets were dominated by retail investors. Now, most buyers are “pros.” Think asset managers, hedge funds, endowments, and pensions.
This totally changes the market from one dominated by short-term, speculative frenzies to one where long-term-minded money managers are in control.
- What comes after regulatory clarity?
More than a decade’s worth of market experience has taught me the importance of a good filter.
When you’re a young whipper snapper, you try to read it all. You drink from the information firehose looking to gain an edge. But I’ve learned what you ignore is just as important as what you pay attention too.
The most important thing for crypto investors remains innovation.
What problems is blockchain solving? What new products built on crypto rails delight customers and are growing fast?
Find great crypto businesses building real products—and making real money—and the rest will take care of itself. If you want to make money, ignore all the macro “noise.”
The most insidious part of crypto’s regulatory crackdown was outlawing innovation. Crypto entrepreneurs were subpoenaed, debanked, and sometimes had their homes raided by men with guns. Disgusting.
Thankfully, the innovators are now free to build.
From being deep in the weeds of this industry, I know how much pent-up talent there is. Crypto is a $4 trillion asset today. Innovation and engineers building real products is what will propel us to $10 trillion and beyond.
I’ve said from Day 1 that I wouldn’t touch 99% of cryptos. But the other 1% will change the world.
Each week in my Jolt investing letter, I unpack the disruptive megatrends reshaping entire industries, and the opportunities they create. If you’d like to join us, go here.
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Stephen McBride is Chief Analyst, RiskHedge. To get more ideas like this sent straight to your inbox every Monday and Friday, make sure to sign up for The Jolt, a free investment letter focused on profiting from disruption.