This Week in Crypto: A Flock of Black Swan Events

The cryptocurrency sector is in turmoil after a dramatic week. That, of course, is nothing new for crypto — but what is new is the reason for the turmoil: ongoing action from the seat of power in Washington, D.C.

On Sunday (March 2), President Donald Trump gave the digital asset sector more news to look forward to, after a monthlong market sell-off that saw bitcoin drop nearly 20% from its post-election record high, by announcing not just the creation of a U.S. strategic cryptocurrency reserve but also the digital assets it could be composed of: bitcoin, ethereum, XRP, Solana’s SOL coin and Cardano’s ADA.

The news was met with mixed reactions from the crypto space.

“I have nothing against XRP, SOL, or ADA but I do not think they are suitable for a Strategic Reserve. Only one digital asset in the world right now meets the bar and that digital asset is bitcoin,” tweeted crypto billionaire and Trump supporter Tyler Winklevoss on X.

“The US taxpayer should not be exit liquidity for cryptocurrencies that are decentralized in name only,” added Naval Ravikant, a serial tech entrepreneur, investor, and founder of one of the earliest crypto hedge funds, MetaStable Capital, also on X.

“What’s clear is that the US President is now the driving force for crypto market movements, and he is certainly playing favorites with crypto tokens,” Chris Chung, founder of Solana-based swap platform Titan, told PYMNTS.

More details of the U.S. Strategic Crypto Reserve are set to be announced Friday (March 7) during the White House Crypto Summit. That’s right — not only is the U.S. considering purchasing it’s own war chest of digital assets, but the government is hosting a pro-crypto summit at the White House.

Somewhat incredibly, these black swan events were far from the only crypto sector news to take flight over the past few days.

Read more: What the White House’s Crypto Strategy Means for Payments Innovation

Taking the Enforcement Out of Regulation

One of the most immediate about-faces taking place in the American crypto landscape is playing out across the regulatory sphere.

The U.S. Securities and Exchange Commission (SEC) has in the last month dismissed or halted at least eight cases against crypto firms, including some of the industry’s most high-profile names. That includes the back-to-back lawsuits against Coinbase and Binance, along with threats of possible action against companies such as Robinhood.

On Monday (March 3), the crypto exchange Kraken said the SEC has agreed to drop its lawsuit with prejudice, meaning it cannot be brought again.

The agency has also recently replaced its crypto division with a new, and smaller, Cyber and Emerging Technologies Unit, devoted to probing a range of issues beyond digital assets.

On Tuesday (March 4), the U.S. Senate also overturned a rule requiring cryptocurrency platforms to report customer transactions to the IRS. The vote marks the latest in a series of victories for the crypto sector.

Speaking with PYMNTS CEO Karen Webster earlier this week, QED Investors partner Amias Gerety pointed to the importance of this gathering in light of the rapid expansion of the crypto market and its implications for investors and the wider financial system.

“There’s an ongoing struggle to balance innovation with financial stability,” said Gerety, a former Treasury official under the Obama White House.

He acknowledged that while crypto offers new opportunities, it also carries significant risks, especially in areas of fraud, security and systemic vulnerabilities. Regulatory clarity, Gerety contended, will be critical in promoting a healthy digital asset ecosystem.

Read more: How the World Does Crypto and What It Means for US Businesses

Bringing Crypto Into the Financial Mainstream

As enforcement actions dissipate, crypto is continuing its advance onto the shores of traditional financial services and even payments.

Last week (Feb. 27), Flexa added tap-to-pay support to its digital currency acceptance platform, enabling users to pay with crypto at retail locations using NFC-enabled hardware wallets.

On Tuesday, bitcoin developer Blockstream announced it has reportedly landed a multibillion-dollar investment to launch a trio of funds, two of which will be focused on meeting a new appetite for crypto lending.

Tuesday also saw Circle’s USDC stablecoin become the first to be listed under Japan’s new payments framework, and last week (Feb. 27), Wirex also announced the expansion of its stablecoin payment platform, Wirex Pay, to the U.S.