Federal Reserve Reverses Crypto Guidance, Boosting Industry Adoption 80%

The Federal Reserve, along with the OCC and FDIC, has officially rescinded guidance that previously discouraged banks from engaging with crypto firms. This move has been widely praised within the industry, with Senator Tim Scott calling it a reversal of "harmful Biden-era guidance." The rollback is seen as a significant step towards mainstream adoption of digital assets, putting the industry "80% of the way" toward full integration, according to Tony Edward, host of the Thinking Crypto Podcast.

However, not all industry figures are entirely optimistic. Senator Cynthia Lummis, while acknowledging the rollback, pointed out that the Fed continues to impose restrictions related to master accounts and perceived reputation risk, which may limit broader crypto access. Despite these concerns, Edward views the Fed’s action as a foundational change that could pave the way for more comprehensive reforms once Congress passes the pending Stablecoin and Market Structure bills.

In another significant regulatory development, NASDAQ has proposed a four-tiered framework for classifying digital assets. This system includes Financial Securities, Digital Asset Investment Contracts, Digital Asset Commodities, and Other Digital Assets. The proposal aims to create a more structured and tailored regulatory environment for digital assets, which could foster innovation and growth in the sector.

On the market side, there are signs of continued bullish momentum. On-chain data from Santiment indicates a sharp rise in wallets holding 10 or more BTC, suggesting that whales are accumulating Bitcoin in anticipation of further price gains. With Bitcoin trading above $95,000, the bullish trend remains strong, although a pullback is expected due to overbought RSI levels. Edward advises investors to have a profit-taking plan in place, noting that historical trends suggest May could bring significant gains before a possible June cooldown.

Institutional interest in Bitcoin as a treasury reserve asset continues to grow. Semler Scientific, a health tech company, has purchased an additional $10 million in Bitcoin, bringing its total holdings to over 3,300 BTC worth roughly $300 million. This follows the lead of firms like Strategy, which has also invested heavily in Bitcoin, signaling a broader trend of institutional adoption.

Looking ahead, the crypto industry is focused on the upcoming hearing on May 6th, where the House Financial Services and Agriculture Committees will discuss an updated version of the FIT21 market structure bill. President Trump has urged Congress to pass both major crypto bills before the August recess, highlighting the growing political support for crypto regulation. Edward sees this as a positive sign, indicating that major agencies that were once against crypto are now working to support it, marking a significant shift in the regulatory landscape.