Donald Trump's election victory and the Republican control of Congress may be setting the stage for what many in the sector believe will be a golden era of lighter regulation and wider adoption.

What Happened: The crypto industry, which felt vilified under the Biden administration, is now anticipating a more hands-off approach to digital currencies, according to a report by The Financial Times on Thursday.

Industry participants and people close to the President-elect have been upbeat about the prospects of Bitcoin (CRYPTO: BTC) and the wider digital asset sector.

Eric Trump, speaking at the Bitcoin Mena 2024 conference in Abu Dhabi in December, assured the audience that his father would keep his promises to be "the most pro-crypto president" yet.

He drew parallels between the crypto industry and the Trump family, stating, "I saw them come after you. I saw them strip your bank accounts."

President-elect Trump has promised to create a strategic Bitcoin stockpile and install a crypto advisory council.

His nomination of Paul Atkins, a pro-crypto businessman, to lead the Securities and Exchange Commission has been celebrated by industry executives. T

The price of Bitcoin breaking through the $100,000 level post-election has further fueled optimism.

Why It Matters: This potential embrace of crypto by Washington and Wall Street raises concerns about increased risks for investors.

Eswar Prasad, senior fellow at the Brookings Institution, warned in The Financial Times, "The combination of greater legitimacy and light regulation is what I really worry about."

He added that broader adoption at both retail and institutional levels could pose significant risks.

The crypto industry has invested heavily in lobbying efforts, with groups like Fairshake spending millions to support pro-crypto politicians.

Josh Vlasto, spokesperson for Fairshake, stated their work would have "a clear and immediate impact" on Congress's ability to approve favorable crypto regulation.

As the industry looks forward to friendlier regulations and potential mainstream acceptance, some experts caution about the systemic risks this could introduce to the traditional financial system.

Hilary Allen, professor at American University Washington College of Law, noted the irony in an industry born out of desire for an alternative financial system now seeking acceptance from the U.S. government.