Fed Rollback, NASDAQ Push, and Bitcoin Demand Point to a Breakout Crypto May

• Federal Reserve rescinds crypto restrictions, sparking optimism across digital asset markets
• Bitcoin whale accumulation strengthens as BTC and crypto assets flash bullish signals
• FIT21 hearing on May 6 could formalize U.S. crypto market structure before summer recess

The crypto industry is seeing fresh regulatory momentum this week. Tony Edward, host of the Thinking Crypto Podcast, emphasized the Federal Reserve’s rollback of restrictive policies that once limited banks’ involvement with crypto assets. 

Edward described the move as putting the industry “80% of the way” toward full mainstream adoption.

Fed Rescinds Crypto Restrictions, Drawing Industry Praise

On Friday, the Fed, along with the OCC and FDIC, officially rescinded guidance that discouraged banks from working with crypto firms. Given the Fed’s central role in banking oversight, this move has attracted industry-wide commendation. Senator Tim Scott praised the move as a reversal of “harmful Biden-era guidance.” 

Related: Saylor Declares Victory as Fed Removes Major Hurdle Between Banks Bitcoin

However, Senator Cynthia Lummis offered a more cautious take. While acknowledging the rollback, she argued that the Fed continues to limit crypto access by maintaining restrictions tied to master accounts and perceived reputation risk. 

Despite lingering concerns, Edward sees the Fed’s action as a foundational change, likely paving the way for broader reform once Congress passes the pending Stablecoin and Market Structure bills.

NASDAQ Proposes Four-Tiered Framework for Digital Assets

In a separate regulatory development, NASDAQ submitted a comprehensive letter to the SEC suggesting a four-tier classification system for digital assets. Edward described the move as “incredibly bullish.” The proposed asset categories include:

• Financial Securities: Tokens representing traditional assets like stocks or ETFs.
• Digital Asset Investment Contracts: Tokens that qualify under a modernized Howey Test.
• Digital Asset Commodities: Crypto assets like Bitcoin and Ethereum that meet existing commodity definitions.
• Other Digital Assets: NFTs, meme coins, and tokens outside securities/commodities classifications.

Speaking at a recent SEC roundtable, new Chair Paul Atkins acknowledged that past regulatory approaches stifled innovation. He signaled a fresh commitment to building a tailored crypto regulatory framework, working alongside Congress and the Trump administration. 

Bitcoin Whale Accumulation Suggests Bullish Continuation

On the market side, Edward highlighted fresh on-chain data from Santiment showing a sharp rise in wallets holding 10 or more BTC. This suggests that whales are accumulating ahead of further price gains. 

With Bitcoin trading above $95,000, he said the bullish momentum remains intact, although a pullback is likely soon due to overbought RSI levels.

“Have your profit-taking plan in place,” Edward advised. He noted that historical trends suggest May could bring significant gains before a possible June cooldown.

Related: Coinshares: Bitcoin All-In Mining Cost Reached $137K for Listed Miners in Q4 ’24

Edward also reported that 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 (formerly MicroStrategy) and signals continued institutional interest in using Bitcoin as a treasury reserve asset.

All Eyes on FIT21 Bill as Congress Pushes for Crypto Clarity

Looking ahead, Edward pointed to a critical hearing scheduled for 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.

Related: Crypto Industry Scores Major Win as U.S. House Passes FIT21 Bill

“This is what we want to see: real progress,” said Edward. “All the major agencies that were once against crypto are now working to support it. Operation Chokepoint 2.0 is dead. The winds have shifted.”