Displaying items by tag: regulation

Bitcoin has had a rough stretch since Donald Trump's election victory, following a failed attempt to surpass the $100,000 mark. This four-day decline has reduced its value by roughly 8%, with Bitcoin trading at $91,615 on Tuesday morning in New York. 

Meanwhile, the broader cryptocurrency market saw a dip in its $1 trillion gain since the November 5 election. The struggle to break through the $100,000 threshold might prompt traders to lock in profits, according to crypto analyst Noelle Acheson, though she believes this setback will be short-lived.

Despite the current dip, experts like Adrian Przelozny remain optimistic about the market’s future, expecting the bullish trend to persist in 2025. Trump's recent commitment to supporting crypto regulations and building a Bitcoin reserve has further fueled optimism.

Finsum: We remain cautious regarding bitcoin in the near term because the priority of these policy changes is still up in the air. 

As investors brace for the effects of Donald Trump's second term, Scott Sperling, Co-CEO of Thomas H. Lee Partners, offers a fresh outlook on the private equity scene. Mark Rowan, CEO of Apollo Global Management, hints at pursuing strategic acquisitions to bolster the firm's growth, while maintaining a strong focus on its existing operations. 

Sperling foresees an uptick in economic expansion and reduced operational costs under the new administration, largely due to regulatory reforms. He reflects on the past few years, noting that stringent regulations have made deals like mergers and acquisitions more complex and costly.

 Sperling also highlights the recent pressure on major tech companies, as government scrutiny and antitrust actions could stifle innovation in key sectors. Nonetheless, he remains hopeful that private equity will thrive, despite the challenges posed by shifting political dynamics

Finsum: We anticipate both regulatory and policy changes to be friendlier to P/E in the new administration. 

Private equity's growing control of rental housing has sparked concern as rents continue to rise, prompting calls for scrutiny from lawmakers. Senator Elizabeth Warren, joined by three colleagues, recently questioned KKR on how its recent $2.1 billion investment in rental units across eight states will impact long-term tenants and rental rates. 

KKR asserts its investments provide high-quality housing, but critics argue these acquisitions contribute to rising costs and fewer homeownership opportunities for regular buyers.

A Harvard report shows that rents have surged far faster than household incomes, putting financial strain on tenants who are forced to limit spending on essentials. Vice President Kamala Harris and other leaders have also highlighted private equity’s role in pricing out individual buyers and impacting housing affordability. 

Finsum: This type of regulation will obviously depend on the election results but there is little doubt that the Harris administration will make large changes to housing. 

California’s new retirement law, effective January 1, 2025, reduces protections on tax-qualified retirement plans, impacting debtors who may now face increased vulnerability to creditor claims. This law applies a means test to assets in 401(k)s and similar plans, allowing judges to assess how much of these funds can be claimed by creditors based on the debtor’s other assets and timeline to retirement. 

While federal ERISA protections still shield assets within qualified plans from creditors, these safeguards do not extend to distributions, meaning assets will be only partially protected once withdrawn. 

Some debtors may consider relocating to states offering full retirement asset exemptions, while others might roll their assets into self-directed IRAs, potentially securing greater protection through international investments. 

Finsum: The election will play a pivotal roll in the future of retirement regulation and advisors should monitor the developments. 

The U.S. is close to finalizing rules that will restrict certain American investments in China’s artificial intelligence sector, with a focus on national security. These regulations, currently under review by the Office of Management and Budget, are expected to be released soon and stem from an executive order issued by President Biden in August 2023. 

The new rules will require U.S. investors to notify the Treasury Department about AI-related investments and limit funding for technologies like semiconductors, quantum computing, and microelectronics that could benefit China's military. 

Some exceptions, such as investments in publicly traded securities and certain limited partnerships, have been proposed. Experts expect further clarification in the final rules, particularly regarding AI's scope and the conditions for limited partners. 

Finsum: There seems to be broader efforts to safeguard U.S. technological from China and this trend is worth monitoring.