Earlier this month, U.S. President Donald Trump announced the creation of the Strategic Bitcoin (BTC 0.31%) Reserve and the United States Digital Asset Stockpile. The former will hold Bitcoin — no surprises there. The latter will hold four more of the largest cryptocurrencies: Ethereum (ETH 1.64%), XRP (XRP -0.34%), Solana (SOL 1.82%), and Cardano (ADA -0.24%).

The fact that the U.S. is stockpiling crypto is exciting news for crypto investors. But are these good cryptocurrency investments? Let’s take a closer look at each one.

1. Bitcoin

Bitcoin is the original cryptocurrency and has also been the most successful. At the time of writing, its market cap is $1.7 trillion, larger than that of every other cryptocurrency combined. Over the last three years (as of March 19), Bitcoin’s price has increased by 98%, well ahead of the S&P 500‘s 27% return.

While Bitcoin was intended as a decentralized digital currency, transactions are too slow and expensive for it to work as a payment method. Processing times generally range from 10 minutes to over an hour, depending on network congestion, and fees are around $1 per transaction.

Despite that, Bitcoin has caught on as a digital store of value, or “digital gold.” The supply is capped at 21 million Bitcoin, adding an element of scarcity to it. If you’re looking for a way to hedge against inflation or add cryptocurrency to your portfolio, Bitcoin is worth considering.

2. Ethereum

Ethereum is the second-largest cryptocurrency by market cap, and it became popular through introducing smart contracts. A smart contract is a program built into a cryptocurrency’s blockchain network to record transactions.

Developers can use smart contracts to launch decentralized apps (dApps). This gives Ethereum a wide range of uses, including decentralized finance (DeFi) services, such as crypto lending platforms, blockchain gaming, and launching new crypto tokens.

Because Ethereum was the first to offer smart contracts, it has a large lead in terms of market share. According to DefiLlama, Ethereum currently has $46 billion in total value locked into its DeFi applications, the most of any blockchain.

On a negative note, Ethereum’s performance lags behind other smart contract blockchains. The average transaction fee is $0.19 as of March 19, compared to $0.00025 for rival Solana. Ethereum has also lost 34% of its value over the last three years. You’re better off avoiding Ethereum until it proves that it can reverse this downward trend.

3. XRP

XRP is the native cryptocurrency for Ripple, a blockchain designed as a cross-border payment solution. The current system of choice for international payments, the ​​Society for Worldwide Interbank Financial Telecommunications (SWIFT), can take three to five days for international banking transfers. Fees generally cost $15 to $50, depending on the banks involved.

On the Ripple blockchain, transactions process within four to five seconds for a fee of 0.00001 XRP, a fraction of a cent. In addition to being used for its minimal transaction fees, XRP is also a bridge currency used to facilitate international transfers.

With a real-world use case, XRP is one of the stronger crypto investments currently available. Over the last three years, it has topped every other cryptocurrency on this list with its 187% return. Its biggest headwind since 2020 has been a lawsuit from the Securities and Exchange Commission (SEC), but on March 19, RippleLabs CEO Brad Garlinghouse announced that the SEC had dropped the lawsuit.

4. Solana

Solana is a competitor to Ethereum, as it also provides developers with a platform to launch dApps. The difference is Solana’s unique proof-of-history system for validating transactions, which makes it a far more efficient blockchain.

As mentioned above, the average transaction fee on Solana is just $0.00025. It processes over 4,000 transactions per second (tps). In comparison, Ethereum processes about 17 tps, because it hasn’t developed a fast method to validate transactions like Solana has.

Like all cryptocurrencies, Solana is a high-risk, volatile investment. But it’s up 39% over the last three years, and its speed and low costs should continue attracting developers to the Solana ecosystem.

5. Cardano

Cardano is another Ethereum competitor that supports smart contracts and allows for the development of dApps. It helped popularize the proof-of-stake system, where people who own a cryptocurrency can pledge their tokens to be part of the transaction validation process and earn rewards. The proof-of-stake system has minimal energy requirements, and even Ethereum adopted it in 2022.

One of the unique things about Cardano is the developers’ dedication to using peer review and evidence-based research. This hasn’t always been to its benefit, though. Cardano’s development has been notoriously slow. For example, it didn’t introduce smart contracts until 2021.

Cardano’s price has decreased by 18% in the last three years. As with Ethereum, it’s best to see if Cardano can build any forward momentum before committing your money to it.

Don’t base your portfolio on the crypto reserve

Just because the U.S. government will be stocking up on these five cryptocurrencies doesn’t mean you should invest in all of them. Cryptocurrency is a risky, unproven asset class. Two of the cryptos on this list, Ethereum and Cardano, have lost value over the last three years. Even though the others have done well, they’re still highly volatile.

As far as crypto investments go, Bitcoin is the safest option, relatively speaking. It’s the most well-known cryptocurrency, and it has been the largest since the very beginning. If you’re looking for cryptocurrencies other than Bitcoin, XRP and Solana are two standout projects. With Bitcoin, XRP, and Solana, you could have a solid crypto portfolio that covers multiple use cases.

No matter which cryptos you choose, be careful about your asset allocation. Because of the risk involved, cryptocurrency shouldn’t be more than 5% to 10% of your portfolio. Use the rest to invest in stocks, bonds, and other stable assets.

Legal terms · Securities law · Cryptocurrency laws

The expansion of virtual currencies like Bitcoin and Ethereum has put U.S. regulators in a dilemma between encouraging innovation and safeguarding investors.

The evolution of cryptocurrency is primarily due to the rise in technology worldwide. It has pushed financial boundaries, leaving with the possibility that cryptocurrencies may become the central element of the global economy.

The significance and impact of the use of cryptocurrency in the U.S. highlights the need to regulate it. However, there is a challenge in establishing a clear policy framework. With the digital revolution taking place through cryptocurrency, the state and federal governments are trying to determine how to define their role in regulating this new asset class in the best way possible.

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What is cryptocurrency?

What is cryptocurrency regulation?

How is cryptocurrency regulated?

State regulations

International Standard-Setting Bodies

Challenges in the US crypto regulation

What is cryptocurrency?

Cryptocurrency is a type of digital money that is a decentralized digital asset designed as a medium of exchange, utilizing cryptographic protocols to regulate the creation of new units. It exists only online and is not controlled by any government, central bank, or authority.

Cryptocurrency uses a secure technology called cryptography to keep transactions safe and verify fund transfers to prevent fraud. It operates on a decentralized system and transactions are recorded on a public ledger called blockchain. The regulatory treatment of cryptocurrency varies across jurisdictions, with legal considerations encompassing anti-money laundering compliance, securities laws, taxation, and consumer protection frameworks.

What is cryptocurrency regulation?

Crypto regulations are the legal rules and guidelines that are present and issued by governments to shape how digital assets such as virtual currency operate. These laws have varied approaches across nations.

In the U.S., there are various states wherein some are friendly towards market participants embracing crypto with clear regulations, while others ban it outright.

Around 60 percent of U.S. citizens lack confidence in cryptocurrency trading or investment, considering the existing systems to be unreliable or unsafe. One primary reason for this distrust may be the absence of a single, consistent set of laws to regulate cryptocurrencies.

The existing regulations range from covering everything about how cryptocurrencies are to be created and traded to how they interact with traditional financial systems. Well-defined rules can help the crypto market in the following ways:

• Help in protecting investors from scams and market manipulation
• Ensure that there is transparency in the transaction, along with accurate information
• Help prevent illegal activities like money laundering, fraud, misleading information, etc
• Clarify the tax rules that apply to digital currencies
• Encourages market participation and confidence in the investors while encouraging blockchain innovation
• Regulates the risks that are or may be associated with the transactions

How is cryptocurrency regulated?

No defined regulation is used to regulate cryptocurrency in the U.S. as of 2025.

However, a major crypto legislation was introduced in 2024, i.e. the Financial Innovation and Technology for the 21st Century Act (or FIT21), that has been passed by the U.S. House of Representatives but has not yet been enforced. The legislation is aimed at emphasizing the role of the Commodity Futures Trading Commission (CFTC) as a lead crypto regulator in the U.S.

In the absence of one framework for cryptocurrency, the authorities try to regulate and enforce the already existing laws both at the federal and state levels, which are as follows.

Federal regulations

At the Federal level, regulations have predominantly dealt with various administrative agencies and bureaus.

The Securities and Exchange Commission (SEC)

The SEC primarily deals with securities such as convertible notes, stocks, debentures, etc. They aim to protect investors through mandatory registration of the securities that qualify for it.

The SEC brought lawsuits against major platforms such as Coinbase, Binance, Kraken, etc, for violation of regulations.

Due to the difference between the cryptocurrency and securities, a judicial split emerged in 2023, with Southern District of New York (SDNY) Judge Torres ruling in SEC v. Ripple Labs that only the institutional sales of XRP were securities, while Judge Rakoff in SEC v. Terraform Labs held that Terraform’s UST stablecoin was a security.

Courts remain divided on this issue at the time of this writing.

Commodity Futures Trading Commission (CFTC)

CFTC is a federal agency that is tasked with regulating U.S. commodities and derivative markets.

The CFTC regulates cryptocurrencies as commodities under the Commodity Exchange Act and has developed jurisdiction in derivative markets, all of which are set forth in decisions such as CFTC v. McDonnell (2018) and CFTC v. My Big Coin Pay (2018), etc.

In 2017, the CFTC introduced a self-certification process for bitcoin futures which allowed exchanges to launch crypto derivatives. For enforcement measures, the CFTC has engaged in high-profile enforcement matters against Uniswap, Binance, Celsius, Ooki DAO, and secured an order against defaulted FTX to pay a penalty of $12.7 billion.

Internal Revenue Service (IRS)

Since 2014, the IRS has treated cryptocurrency as a digital representation of value which is different from a representation of the U.S. dollar or any other real currency. It functions as a unit of account, a store of value, and a medium of exchange.​

Being categorized as property makes each sale, trade, or buying of cryptocurrency taxable under capital gains taxes like stocks or property. Regardless of whether one incurs profit or loss, correct reporting of the same must be done according to the IRS.

US Department of the Treasury’s Financial Crimes Enforcement Unit (FinCEN)

FinCEN was the first U.S. federal regulator to address cryptocurrency, by issuing guidance back in 2013.

It governs virtual currency businesses and wallet services as Money Services Businesses and mandates them to have anti-money laundering and counter-terrorism financing regulations, specifically on Money Services Businesses dealing with Convertible Virtual Currency.

US Department of the Treasury’s Office of Foreign Assets Control (OFAC)

OFAC is a regulatory agency that administers and enforces U.S. economic and trade sanctions to maintain national security and foreign policy interests.

These sanctions target countries, terrorists, narcotics traffickers, and other threats including those involved in cryptocurrency activities. OFAC applies the same sanctions compliance standards to transactions involving digital assets as it does to those involving traditional currency.

U.S. Department of Justice (DOJ)

In October 2021, the DOJ created the National Cryptocurrency Enforcement Team (NCET) to enhance its investigative resources to control criminal activity in the crypto environment.

The DOJ has been involved in several high-profile cases and has even charged the crypto market with insider trading, including against former Coinbase exchange employees.

Federal Deposit Insurance Company (FDIC)

After issuing joint prudential crypto releases in November 2021, the FDIC instructed all FDIC-supervised institutions in April 2022 to notify if they were conducting crypto business or intended to engage in it. This was required so the FDIC could review the information provided.

Federal Reserve Board (FRB)

FRB supervises the banking institutions and banking activities.

It issued reports on stablecoins and central bank digital currency in January 2022. After that jointly in 2023, with FDIC and OCC, the FRB released two statements on the risks that are associated with crypto assets and the participants.

The FRB also issued supervisory guidance requiring banks under its oversight to notify their lead supervisory contact before engaging in crypto-asset activities.

State regulations

Financial regulators for cryptocurrency at the state level are as follows:

New York State Department of Financial Services (NYDFS)

In contrast to other crypto regulations that have been prominently adopted by other states, New York has a different regime that is focused on customer protection.

It was the first comprehensive crypto regulatory regime among major U.S. states which led the way by introducing the concept of BitLicensees — used to self-certify the listing or adoption of new virtual currencies. However, it is generally considered to be prohibitive and burdensome by the market participants.

California Department of Financial Protection and Innovation (DFPI)

On one hand, the DFPI has shown a friendly approach to the crypto market participants providing a narrow reading of state licensing requirements. On the other hand, it has implemented a comprehensive state crypto regulatory framework.

State attorneys general, including the New York State Attorney General (NYAG)

NYAG is one of the crypto regulators in the U.S. that has actively participated in filing charges and settling with the crypto platforms and market participants of all sizes.

International Standard-Setting Bodies

There is a constant rise in the involvement of digital currency transactions around the world, which often lightens the line between the borders as well.

Now, given the evolving complexities of digital asset markets, several prominent international financial standard-setting bodies have undertaken initiatives to regulate cryptocurrencies and make sure that they are regulated across jurisdictions.

Bank for International Settlements (BIS)

BIS acts as the central bank, and therefore it plays a role in shaping the regulatory framework for Central Bank Digital Currencies and stablecoins. BIS has issued various reports on stablecoin arrangements.

Basel Committee on Banking Supervision (BCBS)

BCBS is the primary global standard-setting body for prudential bank regulation, which has developed a framework to govern the exposure of banks to crypto assets.

Financial Stability Board (FSB)

The FSB contains the regulatory, supervisory, and oversight recommendations for crypto-asset markets which establishes high-level global standards for crypto regulation.

Financial Action Task Force (FATF)

FATF is a global authority on anti-money laundering and counter-terrorist financing, it has issued extensive guidance on mitigating illicit finance risks in the crypto sector.

3 Key challenges

Cryptocurrency regulation in the U.S. presents significant challenges due to its fragmented nature, requiring businesses to comply with a complex framework of overlapping and, at times, conflicting federal and state laws.

1. ​Since each state has different regulations, it makes nationwide operations difficult.
2. Money transmitter licensing rules differ across states, which may be friendly or strict, making compliance restrictive and complex.
3. There is a lack of clear crypto-specific laws which forces businesses to interpret existing financial regulations in different ways, leading to uncertainty and misinterpretation.

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Bitcoin is surging after a rollercoaster few months after Donald Trump’s speech at a major cryptocurrency summit.

Trump spoke at the Digital Asset Summit (DAS) in New York on Thursday and bitcoin, by far the largest cryptocurrency, recovered much of its losses from recent months.

Bitcoin went over $100,000 (£77,200) for the first time in December 2024 but has since crashed down to $79,000 (£61,000) amid wider fears of economic turmoil caused by the Trump administration.

But ahead of Trump’s speech, the currency climbed back up to $86,000 (£66,400).

Speaking via video link from the White House Trump promised to make the US a bitcoin “superpower” and the “undisputed crypto capital of the world.”

He highlighted his administration’s actions on loosening regulations on the crypto industry, including ending what he called “operation chokepoint 2.0”, which saw federal agencies encouraging banks to not operate in risky sectors, particularly the crypto industry.

Trump said the operation went too far and acted as a form of “lawfare” against the industry.

The president has also instituted the US government’s Crypto Federal Reserve which will hold certain cryptocurrencies when they are acquired by state operations rather than sell them.

Despite the losses of recent months bitcoin has been on an incredible run in recent years after hitting a low of $16,000 (£12,300) in 2022. A lot of the recent gains have been associated with an event known as the Bitcoin halving that happened on 20 April 2024.

Halving is an event automatically triggered by the bitcoin network, which is designed to prevent inflation in the cryptocurrency but it can also trigger large price rises.

The halving happens roughly every four years and after each halving the following one to two years often see bitcoin’s price explode.

Aaron Peak, personal finance expert at credit reference company CredAbility, said: “Bitcoin is notoriously volatile: prices can surge or crash unpredictably, so investors should always be cautious.

“Bitcoin’s price has been on a rollercoaster recently, and we’ve seen some major price swings in recent months.”

What is Bitcoin halving?

Bitcoin halving reduces the rewards of mining the cryptocurrency by 50%.

Crypto miners use high-end computing rigs to perform calculations and are rewarded with bitcoin but after each halving, the reward decreases.

Miners complete calculations required to verify transactions, using computers to make guesses to solve the puzzle and the first to solve it adds a new block to the blockchain – a digital ledger that records and verifies transactions across a network of computers.

The dates of the halvings are not set, rather they occur every 210,000 blocks that are mined.

Aaron Peak, personal finance expert at credit reference company CredAbility said: “Right now, miners – who verify bitcoin transactions – earn 6.25 bitcoins for each new block they add to the blockchain.”

“After the next halving, their reward will drop to 3.125 bitcoins. This reduces the supply of new coins, which can affect bitcoin’s price.”

Why does it matter?

Bitcoin halving performs several important functions, restricting supply and limiting inflation, which helps to maintain the cryptocurrency’s value.

Peak explains: “Halving is important because it slows down how quickly new bitcoins are created. Historically, bitcoin halving has led to price increases. When fewer new bitcoins enter the market, but demand stays the same (or grows), the price often rises.

“It’s a bit like gold, if mining gold became twice as hard overnight, but people still wanted it, the price would likely go up. However, past performance doesn’t guarantee the same outcome every time, so there are no certainties.”

When is the next Bitcoin halving?

The next bitcoin halving event is expected to happen in 2028, but it all depends on how quickly miners create new blocks, Peak explained.

Peak said: “It will happen after another 210,000 blocks have been added to the blockchain, which usually takes around four years.

“This happens because bitcoin has a fixed supply – only 21 million bitcoins will ever exist. The process is built into bitcoin’s code to control inflation, a bit like how central banks manage the money supply, except no one can change bitcoin’s rules.”

Bitcoin halvings are expected to continue until 2040.