The attitudes of financial advisers toward the crypto asset class are changing fast.

The big picture: More than half of FAs in a recent survey say the presidential election has made them more likely to invest in crypto. This time last year, in a survey from the same folks, hardly any advisers believed bitcoin ETFs would even be approved this year.

Zoom in: The survey of 400 advisers was issued by Bitwise, a crypto index fund manager that offers BITB, one of the top 5 bitcoin exchange-traded funds.

• As the firm continues to push the ETF as an investment vehicle, it conducted the survey with VettaFi to see where advisers stood.
• 96% of them said they have gotten questions about crypto.
• Nearly all (99%) of those who have made allocations for clients plan to hold on or increase it.

The intrigue: Most advisers still can't recommend bitcoin ETFs to their clients, because they work in-house for one of the big investment firms that haven't officially sanctioned any bitcoin funds yet.

• This is not that unusual, Matt Hougan, Bitwise's chief investment officer, tells Axios. A lot of times the big guys like to wait a year or so before recommending a new exchange-traded product.

Yes, but: He also noted that they tend to make an exception for a hot ETF launch, and the bitcoin ETFs have been the hottest. So it is a little strange.

• Morgan Stanley, for one, reportedly allows its advisers to recommend BlackRock and Fidelity's bitcoin ETFs to certain clients.

What he's saying: Hougan doesn't believe the early days are over for bitcoin as an investment until its market cap trumps that of gold.

• With gold's market cap at $18 trillion against bitcoin's nearly $2 trillion, that suggests a lot more room to run.

Friction point: Hougan said we've gone through four years of an administration hostile to cryptocurrency, with an investment regulator who takes an especially dim view.

• That was likely to make the big firms nervous. When and if Paul Atkins gets seated in the SEC, that should be enormously encouraging to the big firms putting bitcoin ETFs on their approved lists.

What we're watching: How bad the next bear market will be.

• Every contraction in crypto has seen an 80%-90% drop in bitcoin price, but, as we've said, it seems like the ETF era could soften that next drop.
• "I think it will be shallower and that it will come back faster and that will mean something is different," Hougan concurred.

The bottom line: "The reality is 95% of the world still doesn't own bitcoin, and the vast majority of institutional investors still don't own bitcoin," Hougan said. "Until that changes, it's still early."

It wouldn't take much for the United States government to become an investor in bitcoin like it is in gold — the question is whether it would do its citizenry any good.

Why it matters: The idea's being touted by President-elect Donald Trump, and seems to be catching on.

Catch up quick: There's two big proposals out there for committing the U.S. to the world's biggest cryptocurrency, and both of them were introduced the same day in July at the same place, at the Bitcoin 2024 conference in Nashville.

• One proposal comes from Trump. The other — a more juiced up version — comes from Senator Cynthia Lummis (R.-Wyo).
• The idea, both say, is that holding bitcoin would give the U.S. some control of an increasingly important global asset. Lummis says it could even help the country reduce its debt.

Trump's plan is for the government to simply keep the bitcoin that it already has.

• That pile — currently 198,000 bitcoins, valued around $19 billion —has been seized from crooks and is held by the U.S. Marshals Service. Normally, the state sells it, using the proceeds to compensate crime victims and fund law enforcement.
• Trump proposes we just quit selling it. That would give us a $19 billion stockpile right now, for free, with more to come! (depending on crime).

Senator Lummis' proposal goes a bit further. She wants the U.S. Treasury to become a buyer of one million bitcoin, with a commitment not to sell any for 20 years unless sold to pay down federal debt.

• Bitcoin, she argues, would complement the U.S.'s existing national reserve assets — such as gold — bolstering the country's financial resilience and strengthening the backing of the U.S. dollar.

Zoom in: The U.S. is already a gigantic holder of gold, with Treasury holding 8,134 tons of the commodity. (None of which serves any formal purpose any longer — it's held over from our gold standard days)

• Funding behind Lummis' proposal to buy a million bitcoin (valued around $100 billion at today's price) relies heavily on something of an accounting trick involving that gold reserve.
• Basically, we're undervaluing our gold wildly. We've had certificates at the Fed since 1973 that say our gold is worth $42/ounce, more than $2,500 below its actual market price.
• By raising that valuation to current levels, Lummis argues, the U.S. Treasury could cash a check at the Fed that should be enough to buy all the bitcoin.

The other side: Cato Institute economist George Selgin doesn't buy it, and sees both proposals as little more than an indirect handout to existing bitcoin investors.

• He does not believe holding bitcoin would protect dollar dominance and he does not believe Lummis's gold-powered financing model is actually a good deal for taxpayers.

"It looks like you are getting something for nothing but you really aren't," Selgin tells Axios of the Lummis plan. All the fresh cash printed up to pay for the gold would end up as deposits with the Fed, deposits it (we) would pay interest on.

• He also doesn't buy the debt reduction angle. He doesn't believe the government would ever actually sell the bitcoin it bought — mainly because we could do that with our gold now to pay down debt, and we haven't.

What he's saying: Gold investors and gold miners would go ballistic if we ever tried to sell, so we don't, Selgin says, because it would hurt the value of their holdings (probably badly).

• So, it's not hard to imagine bitcoin investors and miners would also fight just as hard to prevent federal sales of bitcoin in 20 years.

The broader idea seems to be catching on. Texas, Ohio and Pennsylvania have introduced legislation for state reserves. We're told the idea is brewing in Oklahoma.

• The tiny nations of Bhutan and El Salvador already hold bitcoin. Larger countries, including Russia, Brazil, Japan and (most recently) Switzerland, have floated the idea in their legislatures, following Trump's lead.

The bottom line: Bitcoin, like gold, is increasingly seen as a store of value, a point the Fed chair himself, Jerome Powell, recently made.

• Powell may still consider it unworthy of the Fed's own balance sheet (though Treasury would likely be the steward of any bitcoin, as it is of the gold) — but Trump's loud support, Washington's increasing acceptance and bitcoin's soaring price are likely to keep the idea of a strategic reserve in the conversation.

The Justice Department said its tenth and final distribution of funds to eligible victims of Bernie Madoff would bring their total recovery to 93.7% of their losses.

Why it matters: The fraud was the largest Ponzi scheme in history, with nearly 41,000 recipients ultimately qualified for payments from the Madoff Victim Fund.

How it works: The funds were recovered by the Justice Department's Money Laundering and Asset Recovery Section, which pursues the profits made by criminal enterprises in order to recover them return them to victims.

• These funds were recovered from major investors in Madoff's scheme, his family and from a deferred prosecution agreement and civil action against JPMorgan Chase Bank, according to a release by the Department of Justice.
• Most of the people paid by the Victim Fund had relatively smaller losses, under $500,000.

Catch up fast: Madoff pled guilty to 11 federal crimes in 2009, acknowledging that he had turned his company into a massive fraudulent scheme.

• He was sentenced to 150 years in prison later that year, and died in prison in 2021.

Victims were lured into believing his returns were legitimate because his staff prepared statements about profitable trades it had made on their behalf, backdating the transactions to line them up with the high and low points of various assets.

• Notable victims of the scheme included Hollywood power couple Kevin Bacon and Kyra Sedgwick, the late Nobel prize-winning author Elie Wiesel and the late broadcasting legend Larry King.
• Madoff also took in numerous notable charitable organizations.

The bottom line: Sam Bankman-Fried's FTX fraud trumped Madoff as the top financial fraud of all time, and — thanks to a large amount of luck with crypto prices and the AI boom — a similar recovery looks likely, in much less time.

While the world is focused on President-elect Trump's top-level appointments, the crypto industry might want to watch some government jobs farther down the ladder.

Why it matters: The people in lower profile positions often end up hammering out the crucial policy details that matter for years, or even decades.

Zoom in: Axios checked in with multiple legal and policy sources to see what positions were on their minds, and some roles came up repeatedly. Not surprisingly, several positions within Treasury were among them:

• Treasury's undersecretary for terrorism and financial intelligence. This one kept coming up. This person is responsible for the financial monitoring programs as they relate to national security threats, the sort of thing that caught up Tornado Cash.
• Treasury's undersecretary for domestic finance. This person is also likely to feed big-picture data and recommendations to the White House. (Its current staffer was part of writing a newsmaking report on the use of these assets.)
• Treasury's assistant secretary for tax policy. The industry has long hoped for an exemption on small purchases using digital assets.

Another position raised was within the Department of Energy: the Administrator of the Energy Administration Agency. The old chief attempted to do a special review of Bitcoin miners but got smacked down by a federal court.

Zoom out: As an example of a lower profile position with outsized clout, sources pointed us to the deputy attorney general, because that person makes decisions around cases the DOJ takes up.

• We do know Trump's pick for that role: Todd Blanche, an alum of the U.S. attorney's office in the southern district of New York and Trump's legal defense team.

On the bank regulatory side, the picks for FDIC and Office of the Comptroller will be important, though the president-elect is also making noise about consolidating such agencies.

Lastly, the White House Office of Science and Technology Policy (OSTP) could be important in a few ways. Crypto is, obviously, tech policy. President Biden's office took it as a given that electricity use by Bitcoin was uniquely bad.

• It might also end up being the office that gives desks to whoever ends up working for Trump's AI and crypto czar, David Sacks.
• The OSTP chief and its deputy for tech are likely to be important in setting policy.

Bitcoin's price broke $100,000 on Wednesday night, capping a bull run that has seen the original cryptocurrency rise more than 30% since Election Day.

Why it matters: It's a big round number, and also a symbolic one — marking what could be the industry's next stage of long-term growth.

Catch up quick: The landscape for digital assets, and bitcoin in particular, has never looked brighter.

• ETFs launched in January now hold north of $100 billion in assets — making it easier than ever for anyone to buy bitcoin or ether.
• Wall Street, at one time an enemy crypto dreamed of slaying, has become a crucial ally, adding exponentially to the asset's staying power.
• Clear regulations in the U.S., once a pipedream, are now essentially a certainty. An ally's been nominated to lead the SEC, and crypto will soon have a cheerleader in the White House itself.

The big picture: Excitement around what Donald Trump will do for crypto has poured gasoline on the fire of a bitcoin bull run that was already in motion. But bitcoin hitting $100,000 is not just an effect of Donald Trump.

• It's a milestone hit during the fourth of bitcoin's remarkably predictable "cycles," which we'll explain more about in a moment.
• And if six-figure bitcoin in 2024 wasn't itself predictable — it's certainly a number traders had their sights on long before Trump declared his love of crypto back in May.

About that cycle. Bitcoin is once again following the familiar roughly every-four-year cycle that it has shown since 2013.

• Every four years, by design, the amount of new bitcoin that's created each day drops in half, as it did on April 19.
• This decreases the liquid supply. Once that's felt in the market, it causes an uptick in the price. (Warning: most attempts to time it by get-rich-quick schemers inevitably fail.)

Reality check

The Trump effect, and the promise of a friendlier Congress, has surely accelerated bitcoin's climb to today's new high.

• On Deribit, the leading options exchange in the crypto market, people have been betting on $100,000 bitcoin for a while — but activity surged dramatically after the election.

Risks abound for new investors. To name a few:

• If the next Congress can't get its act together on blockchain legislation;
• If the SEC doesn't soften its stance on cryptocurrency in the new administration (though that looks like less of a risk following Paul Atkins' nomination to lead the agency);
• Or if the president-elect changes his mind and starts selling the nation's bitcoin holdings.

Any of those situations would likely slow, or even halt, bitcoin's positive price momentum.

What we're watching: What goes up always comes down, eventually.

• It's highly likely that retail traders have once again piled into bitcoin and other cryptocurrencies, chasing fast cash as they have in prior cycles.
• How far bitcoin falls at the end of this cycle is the question.

Historically, bitcoin has fallen dramatically from its previous three cycle highs, typically to somewhere right around the prior cycle's height of exuberance.

• After BTC peaked just short of $70,000 in 2021, its price ultimately fell to around $20,000, right about where it peaked in the cycle ending in 2017.
• That said, each crypto boom cycle has been driven not just by the halving but also some additional new piece of technology that got people excited. In 2017, it was initial coin offerings; in 2021, it was non-fungible tokens.

This time could be different

If bitcoin's next bear market ends without it losing 80 to 90% of its value from the peak — say more like 50% — we'll know something has changed, perhaps for good.

• The entrance of institutional investors like state pension funds, deep pocketed companies like MicroStrategy and Block, Inc., and nation-states like Bhutan and El Salvador, could soften the next fall.

State of play: Bitcoin's market cap now makes it the 7th largest asset in the world, higher than market values of Tesla, Meta (Facebook) and even silver, the precious metal.

• It's edging close to the value of Amazon and Alphabet.

This puts the original cryptocurrency in a different position than it has ever been in before.

• This could help soften the severe volatility that has always marked the asset class, making more and more people comfortable with including it in their portfolio — whether or not anyone can find two people who agree on just exactly what Bitcoin is really good for.

The bottom line: In May 2010, a programmer famously spent 10,000 bitcoins to have two (large) Papa John's pizzas delivered.

• Today, 10,000 BTC (worth $1 billion) could buy nearly 65% of Papa John's International — the company.

The cryptocurrency industry spent hundreds of millions of dollars to elect a pro-crypto Washington. Now it wants results.

Why it matters: Crypto interests want to see a much lighter touch from the Trump administration's regulators, and they're also planning to push Congress for a new framework that would help crypto become a bigger part of the financial system.

What we're watching: The most immediate shift in crypto's favor will likely come from the Securities and Exchange Commission, its main regulator.

• The Biden administration has been viewed as acutely hostile, but a new SEC could quickly roll back some of its least popular rules and settle ongoing lawsuits.
• One early target: Biden-era SEC rules that limit banks' ability to holding cryptocurrency for their customers. The rule is unpopular with pretty much everyone — banks, startups, Republicans and Democrats.

New leadership at the agency also might decide to withdraw or settle a slew of lawsuits, many of which focus on technocratic issues in how different cryptocurrencies are regulated.

• President-elect Trump has yet to name someone to lead the SEC, but he has already appointed two relevant Cabinet members known to be fans of digital assets: Howard Lutnick for the Commerce Department and Scott Bessent for Treasury.

Zoom out: The industry's biggest target during the election was Sen. Sherrod Brown (D-Ohio), the chair of the Senate Banking Committee and a crypto foe.

• Brown lost, thanks in no small part to waves of crypto money supporting his challenger, Sen.-elect Bernie Moreno.
• But its push was bipartisan — the advocacy group Stand With Crypto also counts newly elected Democratic Sens. Angela Alsobrooks, Ruben Gallego, Andy Kim and Elissa Slotkin among its allies.
• And there are now 276 pro-crypto House members, according to Stand With Crypto.

What they're saying: "President-elect Trump's vision to make America the crypto capital of the world is a hope shared by the entire crypto industry," Kristin Smith, CEO of the Blockchain Association, wrote in a post-election statement.

• The first two priorities she listed in a letter to the president-elect were to establish a crypto regulatory framework and end the debanking of blockchain companies.

Reality check: The margins in each chamber are narrow so the industry will still need compromises — and patience.

By the numbers: After spending something north of $200 million in the 2024 election cycle, the industry has already said it has $78 million on hand for the midterms.

While the watch party for $100,000 bitcoin enters its second week, fans of ether are feeling left out.

Why it matters: The second largest cryptocurrency, has risen in lock step with bitcoin over the last two cycles, matching BTC's highs with highs of its own — but it's been lagging behind this time around.

By the numbers: In 2017, bitcoin peaked in December at around $20,000. Then in January, ether peaked at about $1,400.

• In November 2021, bitcoin peaked around $70,000. Ether peaked around $4,500 just three days later.

Yes, but: Bitcoin has broken its all-time high twice this year, while ether has bobbed around $3,000 all year, nearly 30% off its high-water mark in 2021.

• And that's while other top-10 cryptocurrencies have jumped on bitcoin for the ride.

Between the lines: The reality of this must be doubly discouraging for Ethereans — the community behind the Ethereum blockchain network — because it had been working so hard to improve itself over Crypto Winter.

• For example, it launched a new way of securing the network that used less energy (a validation system called proof-of-stake).
• It spun up a ton of new connected blockchains to lower costs and moved software updates to improve the user experience.

The intrigue: On top of that, ether got a stamp of legitimacy in July when ether ETFs got approved, giving investors that prefer regulated products a way to access the ecosystem.

• But while bitcoin ETFs have now passed $100 billion in total assets, ether ETFs sit at under $10 billion.

The intrigue: Those exchange-traded products don't give investors access to everyone's favorite thing about ether these days: earning yield through so-called "staking" revenue.

What they're saying: "The fact that there is staking rewards to be held for those who hold Ethereum directly, it makes those ETFs a little less of a silver bullet," BlackRock's head of digital assets products, Robbie Mitchnick, said on the Unchained Podcast.

• Ether is also "a little bit more of a nuanced argument" around technology and innovation, he noted, versus bitcoin's simpler digital gold thesis.
• Still, Mitchnick noted that, for some investors, ether's historical returns more than make up for any of that.

The problem is, ether hasn't been delivering this time.

Zoom out: One issue is that those new connected blockchains mentioned above — chains secured by Ethereum proper — have diluted attention to the parent chain.

• Ethereum is a giant computer that no one controls, and users pay the Ethereum blockchain, in ETH, for it to do computational work.
• Want to send a token to someone else? That costs a little bit of compute, so Ethereum needs to get paid a little ETH to do it.
• If more people want to do things on Ethereum, ETH is worth more.

But now, much of the activity in what's known as the "Ethereum ecosystem" has moved to other chains, where it's been growing.

• That's good for crypto users, but not so good for ether holders. It means users are paying its little brother and little sister chains for all activity in 2024, so ether is less dear.

The latest: All that said, as of Monday ether's been on a bit of a run. Over the past seven days, it's up 8.1%. Over the past 30 days, it's gained 37%.

• In fact, in its weekly report, market-making firm Wintermute's over-the-counter desk reports that bets on stronger ETH price toward year's end are starting to come in.

What we're watching: A new SEC administration might even be open to ETFs with staking built in.

A federal court in Texas vacated a Securities and Exchange Commission rule that redefined a "dealer," in a win for the crypto industry.

Why it matters: It's the latest example of the courts bucking the longstanding precedent of deferring to administrative agencies, following the Supreme Court's decision in the Chevron case.

The latest: "The Court concludes that the SEC exceeded its statutory authority by enacting such a broad definition of dealer untethered from the text, history, and structure of the Exchange Act," Judge Reed O'Connor of the Northern District of Texas wrote in his opinion.

• "The Rule as it currently stands de facto removes the distinction between 'trader' and 'dealer' as they have commonly been defined for nearly 100 years. The Court refuses to allow such a broad expansion of the Exchange Act by way of this Rule," O'Connor wrote.
• Criticism of the rule extended well beyond the blockchain industry. O'Connor issued a similar ruling Thursday in a second case brought by the Managed Funds Association, Reuters reported.

What they're saying: "The Dealer Rule was an attempt by the SEC to advance the agency's anti-crypto crusade, unlawfully redefining the boundaries of its statutory authority granted by Congress," Kristin Smith, CEO of the Blockchain Association, said in a statement.

• The Blockchain Association brought the case in concert with the Crypto Freedom Alliance of Texas.
• "The way I see this is that this is the beginning of the dominos falling," Joshua Ashley Klayman, the head of the digital assets practice at the law firm Linklaters, told Axios.
• "We're reviewing the decision and will determine next steps as appropriate," an SEC spokesperson said.

The bottom line: It's another crypto-related loss in courts for Gary Gensler's SEC, coming on the same day that the agency chief announced the end of his tenure.

Editor's Note: This story has been updated to add the SEC's response to the ruling.