Key Points
The U.S. could approve a complete regulatory framework for cryptocurrencies this year.
Stablecoins and tokenized RWAs could steal the spotlight from traditional tokens.
Crypto investors should be mindful of these market-altering changes.
In recent years, the cryptocurrency market has expanded from a niche, loosely regulated market to a mainstream market subject to much tighter rules and regulations. Many of the market's smaller meme coins have also fizzled out as blue chip tokens -- such as Bitcoin (CRYPTO: BTC) and Ether (CRYPTO: ETH) -- rose to the top. So if you're interested in trading cryptocurrencies this year, you should be mindful of these two upcoming changes.
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First, U.S. senators recently drafted a complete regulatory framework for the cryptocurrency market. If signed into law, it would clearly define which crypto tokens are securities, commodities, or other investments, and allow the Commodity Futures Trading Commission (CFTC) to regulate the industry rather than the Securities and Exchange Commission (SEC). Those more explicit rules, which have drawn mixed reactions from crypto companies, could convince more retail and institutional investors to increase their exposure to the cryptocurrency market.
Second, we'll likely see a shift in interest from traditional cryptocurrencies toward stablecoins, which are pegged to the U.S. dollar, and tokenized real-world assets (RWAs) like stocks, bonds, Treasuries, and gold -- which can be traded around the clock. That shift could draw more investors to the cryptocurrency market. Still, it could also steal the spotlight from the more speculative tokens if investors rotate toward more stable blockchain-based assets.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.