For years, crypto was viewed by many as a weird and fringe investment, hyped up by a bunch of math geeks and used widely by all kinds of unsavory characters, from drug dealers to hackers.
It was known for spectacular returns — and spectacular crashes: Top crypto exchange FTX collapsed just two years ago, landing its CEO, Sam Bankman-Fried, in prison.
Now, a radical shift is taking place under President Trump. From financial regulators to the halls of Congress and all the way to the Oval Office, the U.S. is fully embracing — and even promoting — crypto. It is a remarkable turnaround from the Biden administration.
And crypto companies are emerging as big winners. On Monday, one of the top exchanges in the sector, Coinbase, is joining the S&P 500, the stock market index that tracks the biggest traded companies in the U.S.
"I think it's a historic moment for the industry and it's a really special moment for Coinbase," says Faryar Shirzad, the company's chief policy officer. "Having Coinbase be the first crypto company that's on the S&P 500 and (to be) be in a position where more and more people are beginning to watch how we operate (and) what we do is really exciting for us."
Who gains and who loses from the embrace of crypto
President Trump himself also stands to benefit financially.
Shortly before his inauguration, he even launched his meme coin — a crypto asset known more for being tied to internet memes and jokes. And his family is getting into the action too with financial interests in crypto companies.
Advocates of cryptocurrencies welcome the developments, believing the U.S. is finally embracing — and taking a global leadership role in promoting — an area they say will help define the future of the financial sector.
But critics are aghast, warning that the U.S. is promoting an investment with a history of incredible volatility that will end up hurting scores of average Americans, potentially setting up a financial crisis like the one the world experienced in 2008.
"History is going to show this will be a disaster courting a catastrophe for the rest of the country and especially for Main Street Americans, who are going to get stuck with the bill cleaning up after the next financial crash," says Dennis Kelleher, a prominent crypto critic at advocacy group Better Markets.
Whatever anyone believes, however, one thing's clear: Trump has ushered in a new golden era for crypto.
From Coinbase's inclusion in the S&P 500 to the deep regulatory shifts, here are three ways to understand what's taking place in the crypto sector.
The Trump administration is reshaping how the U.S. regulates crypto
Perhaps the most sweeping changes have taken place at the Securities and Exchange Commission, whose mission is to police the financial sector and protect investors.
Under former Chair Gary Gensler, the SEC aggressively went after the crypto sector, with lawsuits and enforcement including against top crypto companies such as Coinbase.
Gensler, who stepped down early this year, called crypto "the Wild West." and sought to rein in the industry, comparing it to the period before the Great Crash of 1929 when the financial sector was dominated by "hucksters" and "fraudsters" before federal laws on securities were put in place.
His approach set him up as an enemy for the sector as he sought to get companies such as Coinbase to register with the agency and comply with its regulations, despite protests from crypto companies that they shouldn't be considered part of traditional Wall Street.
No longer.
The agency has staged a remarkable turnaround starting even before the new SEC head Paul Atkins was sworn in last month.
In one of the agency's biggest decisions, it dropped a lawsuit against Coinbase that accused the company of trying to operate outside of its purview. It reassigned its chief litigation counsel to a new role managing IT systems. (The SEC did not reply to a request for comment from NPR.)
Crypto companies have welcomed the changes, calling them a needed readjustment from what they saw as excessive heavy-handedness under the Biden administration.
And regulators such as the SEC and the country's law enforcement are not necessarily giving up on overseeing crypto altogether.
Just this month the former founder and CEO of a crypto company called Celsius Network was sentenced to 12 years for fraud and market manipulation.
Yet for consumer advocates, the changes are devastating. Corey Frayer, the director of investor protection at Consumer Federation of America says it's akin to letting "crypto run wild."
It's also personal for Frayer, who was at the SEC for more than three years.
"It is very frustrating to see three years of, you know, 65, 70-hour weeks that me and my team worked to try and protect investors and get this industry compliant with the law, be erased in essentially three months," Frayer says. "And it is surprising to see, given the risks that it creates for the traditional financial system."
Crypto companies like Coinbase are emerging as big winners
When crypto exchange FTX collapsed, many analysts thought at the time that it would permanently tarnish crypto, validating warnings by critics about the dangers of the industry.
Instead, something remarkable happened: Crypto has gone legit.
By early 2024, BlackRock, one of the biggest financial firms in Wall Street, was the first to launch an exchange-traded fund that tracks the price of bitcoin, offering investors — including mom and pop ones — an easier way to invest in the cryptocurrencies.
Super PACs representing crypto companies spent over $100 million in the 2024 election cycle, helping elect lawmakers they view as friendlier to the crypto industry to Congress.
And now, Coinbase is set to become part of the S&P 500 starting at the open of trade on Monday, replacing Discover Financial Services, which is being acquired by Capital One Financial.
"Coinbase joining the S&P 500 means crypto is here to stay. It's going to be in everybody's 401(k), everybody is going to have crypto exposure at least indirectly through Coinbase," said Brian Armstrong, the company's CEO, in an interview with Yahoo Finance.
Trump holds special dinner for investors in his meme coin
As crypto goes increasingly mainstream, another person stands to benefit directly: President Trump himself.
Trump's launch of his meme coin sparked controversy even within the crypto industry, which sees it as a distraction that could undermine the credibility of the industry.
Although $TRUMP lost a substantial part of its value since launching, President Trump sent the price of the coin soaring for a while when he announced he would hold a special dinner this Wednesday for the top 220 holders of the meme coin as measured during a three-week period that ended earlier this month.
That has sparked accusations that investors, including from abroad, rushed to buy Trump's currency as a way to influence the president.
And it goes beyond meme coins.
Members of the Trump family are also in. His sons are involved in crypto ventures that are reportedly exploring financial deals with major crypto companies as well as foreign-backed entities.
Advocates say these have all the markings of a financial crisis
Ultimately, all the changes that are taking place under President Trump have consumer advocates concerned that it will end in a crisis similar in scope to the Global Financial Crisis in 2008.
There are similarities, according to crypto critics.
Back then, financial firms peddled complex financial investments with elaborate names like credit default swaps or collateralized debt obligations — investments that few understood and turned out to be a house of cards that collapsed and dragged the global financial system down with them.
"You have these predatory instruments that come into the marketplace. They're advertised as innovations. They're advertised as serving low-income communities or middle-class Americans. And at the end of the day, they blow up," consumer advocate Frayer says. "The companies that foisted them upon Americans get bailed out or do fine, and everyone else is left holding the bag. So I am afraid this is like 2008 all over again."
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