Welcome to the Forward Guidance newsletter, brought to you by Casey Wagner and Ben Strack. Here’s what you’ll find in today’s edition:

• Congressional leaders returned to the Hill. What now?

• Three crypto futures ETFs debut new strategies. We look at what’s changed.

• A check-in with Ledn CEO Adam Reeds about the crypto-backed loans market.

What to expect in Congress’s final weeks

Congressional leaders are back on the Hill today for the final weeks of the session, and they have their work cut out. 

The current federal spending plan expires on Dec. 20, but a government shutdown seems unlikely (at least at this point). Both Republicans and Democrats have expressed interest in passing a continuing resolution that would fund the government through March. 

The upside for the GOP is they get to put off making bigger decisions until they have control of both chambers. The downside is President-elect Donald Trump probably doesn’t want Congress tied up in appropriation bills when he’s trying to get nominations through the Senate and pass tax, immigration and tariff policies. 

For Dems, the Senate would prefer to focus on getting as many of President Biden’s judicial nominations confirmed before the end of the year. Plus, funding bills need a 60-vote threshold in the Senate, and Republicans only have 53 seats. So Democrats are hardly ceding all their power. 

A three-month stopgap, for better or for worse, is probably what is going to happen. For those looking to see significant crypto policy movement in the first quarter of 2025, this isn’t great news.

Still, industry officials seem confident that the second Trump administration will bring a new era of crypto policy to the US. Coinbase chief policy officer Faryar Shirzad told CNBC this week that he sees versions of the FIT21 bill and the Clarity for Payment Stablecoins Act moving “fairly quickly” next year. 

There’s no denying that a Republican majority in the House and the Senate (narrow as it may be) bodes well for getting crypto policy over the finish line. But at the end of the day, it comes down to what lawmakers — namely, committee heads — want to prioritize. 

We could see some action from Trump in the form of executive orders, especially should he hire a “crypto czar,” a potential position Blockworks first reported on in July. The crypto czar would likely have a team, potentially made up of industry execs and interested parties, we’ve heard from people close to the matter. If you’re looking to read the tea leaves on who might make up this new crypto policy council, I’d start with Trump’s top industry donors. 

In terms of agency actions, the Senate will need to confirm SEC Chair Gary Gensler’s successor, plus a replacement for resigning Commissioner Jaime Lizárrage. 

Rumor has it that Trump could name his pick to lead the SEC today. One outlet reported that Trump already asked former SEC Commissioner Paul Atkins to head the agency (citing those “familiar with discussions”), but that Atkins has not yet accepted. Atkins did not immediately return Blockworks’ request for comment.  

Another name that has come up in SEC chair speculation is Brian Brooks, an ex-acting comptroller of the currency.

The next SEC chair would probably replace Sanjat Wadhwa, who currently works as acting director of the division of enforcement. This has potential to really shake up how the SEC pursues enforcement actions and which actors it chooses to target. 

As for ongoing enforcement actions, I’ve said before that I’m skeptical we’ll see the SEC just drop these cases as the process is a bit more complicated than that. But stranger things have happened. 

We’ll keep an eye on Washington. You keep an eye on your inbox.

— Casey Wagner

This is the difference (year to date, as of Monday’s close) between the S&P 500’s performance vs. the “rest-of-world” equity market, according to DataTrek Research. 

The S&P can largely thank Big Tech companies for its stellar performance, while the US dollar’s gains are weighing on global equities.

A fund issuer has adjusted several of its crypto ETFs to accommodate those seeking a different type of exposure to the space. They’re crypto futures funds that had lost some luster when spot products became available — but now feature a twist.  

Bitwise officially converted three of its futures-based ETFs to “Trendwise” products that rotate between crypto and US Treasurys based on crypto market price trends. 

Essentially the funds will stick to investing in crypto futures when the 10-day exponential moving average of the price of BTC or ETH is above the 20-day EMA, the company said Tuesday. They would rotate into Treasurys when the opposite occurs.

In other words, the strategies consider price momentum in an effort to boost risk-adjusted returns while reducing downside risk.

Bitwise launched its BTC futures ETF in March 2023. It brought to market an ETH futures offering (and one holding both BTC and ETH futures contracts) in October 2023. A year later from the latter launches (just weeks ago), the firm then revealed these planned adjustments.

The fund strategy changes are a few of the latest examples of crypto ETF innovation. As we’ve written about previously, a number of issuers have filed for so-called buffer or covered call strategies, for example, after the listing of bitcoin ETF options. Others seek to bring new crypto assets (solana, XRP, etc.) into the ETF wrapper. 

WisdomTree published plans for a planned XRP fund on Monday — following Bitwise, 21Shares and Canary Capital.

Though US spot bitcoin ETFs have been the category’s chief asset gatherers — with $31 billion of net inflows since their January launches — the crypto space appears poised to evolve and grow as more investors come in (and potentially under the oversight of more crypto-friendly regulators). 

With that, there should be plenty of demand for more nuanced products, and those with a focus beyond the largest crypto asset.

— Ben Strack

I recently chatted with Ledn CEO Adam Reeds about crypto-backed loans. Spoiler: He expects the category could exponentially boom. 

One thing he mentioned to me was, “Price is the best marketer.” 

BTC’s price rose nearly 40% in November — fueled by the victory of pro-bitcoin Donald Trump and scores of crypto-friendly Congressional candidates. 

Ledn, for much of this year, did roughly $1 million per day of crypto-backed collateral financing (mostly BTC). This allows clients to borrow cash without having to sell their BTC or ETH. The company was doing about 2.5x that amount in November, Reeds noted. 

“The last cycle institutions did the work and they said, ‘This is interesting, what about this bitcoin thing?’” he said. “Things take time. You’re in an organization with several hundred or several thousand people; you don’t build consensus overnight.”

Reeds noted previously seeing retail investors with FOMO (fear of missing out) on crypto. This time the institutions seem to be feeling that fear, the CEO added.

Financial services giant Cantor Fitzgerald said in July it planned to launch a bitcoin financing business. CEO Howard Lutnick, recently selected by Donald Trump to lead the Commerce Department, said at the time the firm intended to launch with $2 billion of lending. 

Reeds said he estimates the global bitcoin-backed loan market (on the retail side) to currently be between $1 billion and $2 billion. 

“The analogy I like is what if this was like real estate mortgages on the residential side?” Reeds said. “Well, 60% of homes have a mortgage on them, and what if 60% of bitcoin effectively had a mortgage on it? Suddenly the market’s like $400 billion.

“That’s with bitcoin at $95k,” he added. “What if bitcoin’s at $250k? All of these things start to change.”

Check blockworks.co for a fuller version of my Q&A with Reeds.

— Ben Strack

• Casey will be in DC for the Blockchain Association’s Policy Summit from Dec. 16 to 18. Reach out if you’ll be around. She’d love to say hi. 

• Bitcoin’s price hovered around $95,400 just after 2 pm ET Tuesday — down 0.5% from 24 hours prior. ETH had dipped about 2% over that span, trading at about $3,570 this afternoon. 

• Variant chief legal officer Jake Chervinski wrote a paper with Daniel Barabander and Amanda Tuminelli in part challenging the regulatory view that non-custodial smart contract protocols are money transmitting businesses.