Doing More with Less on Crypto Regulation
This column has discussed the current US administration’s infatuation with cryptocurrency at various points over the last nine months, noting how every pronouncement from the government and regulators has included gushing praise for Trump’s efforts to make the country the most crypto-friendly jurisdiction on the planet.
One of the regular lines is that the US has become the safest and easiest place in the world to trade digital assets. But recent events at the Commodity Futures Trading Commission should not fill investors with confidence.
The head of the CFTC has confirmed that the regulator is finalising approval for the trading of crypto perpetual futures and is working with the SEC on policies for other digital assets.
Read more: Has Europe Killed Crypto Perps Even before It Started?
But, as always, the announcement came with a pop at the previous US administration, with Mike Selig stating that “the prior administration drove a lot of these firms and the liquidity offshore” while noting that an announcement on ‘true’ professional futures was coming soon.
Selig said the two regulators were collaborating to create a taxonomy for crypto assets that should provide clarity around the definition of a security. “Part of that starts with our existing derivatives markets,” he said, claiming that many of these firms want to move on-chain.
However, all this is happening in the wake of the CFTC decimating its Chicago office, which has responsibility for complex enforcement actions. It was revealed last month that all but one of the 20 enforcement attorneys employed at the office had been released, with the final remaining member leaving shortly afterwards.
One of the attorneys was quoted as saying that the move could be linked to the office’s success in securing large settlements from a number of leading crypto exchanges. In a statement, the CFTC said the “Division of Enforcement remains active and fully capable of executing its mission”.
Of course, in a scenario reminiscent of an episode of the classic UK political comedy The Thick of It, where a minister’s political advisers distil feedback from a focus group down to the views of a single person who did not even provide honest responses, there is little danger of anyone else on the CFTC commission expressing concern about current policy, since the other four places on the commission are currently vacant.
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Small Is Beautiful When It Comes to UK Stocks
Data from Aberdeen Investments suggests that UK small caps yielded more than large caps in January, the first time this has happened since the 2000s.
Looking at the bottom 10% of the UK main market by market capitalisation, UK small caps were yielding 3.4% on average in January, compared to around 3% for UK large caps. This indicates that investor sentiment towards the smaller end of the UK equity market is beginning to improve following a year of strong returns in the large cap segment, which was one of the best-performing major asset classes globally in 2025.
UK stocks Thursday: FTSE 100 +0.19%, FTSE 250 +0.61%, FTSE All-Share +0.25%, FTSE SmallCap +0.33%, FTSE AIM UK 50 -0.04%. Gains led by mid- and small-cap segments, while the AIM index edged slightly lower#DAX #CAC40 #IBEX35 #EuroStoxx50 pic.twitter.com/SZ20fhT2Ir
— Rymond_Inc (@rymondIncKenya) September 18, 2025
According to Abby Glennie, manager of the Aberdeen UK Smaller Companies Growth Trust and Aberdeen UK Smaller Companies Fund, UK small caps now share many of the same attributes that made large caps so compelling a year ago, but with potentially stronger growth characteristics.
She observes that valuations for UK smaller companies currently stand at a roughly 25% discount to large caps — a gap that is wide by historical standards — and that income dynamics have shifted meaningfully for small caps, potentially broadening their appeal to income-focused investors.
Read more: How CFD Brokers Can Capture UK’s £10–£50 Micro-Investing Trend in 2026
Ben Ritchie and Rebecca Maclean, investment managers at Dunedin Income Growth Investment Trust, note that faster-growing medium and small companies would be expected to trade at a lower yield than their more mature and slower-growing large cap peers, which they refer to as a telling sign of the value available in this part of the market.
Investors have started to recognise this value since the start of the year, with the FTSE 250 and Small Cap indices catching up with large cap performance.
Growing momentum behind the view that there are other places to invest beyond US equities is welcome news for overlooked markets such as the UK, and for its small and mid-cap sectors in particular.
A Practical Solution to an ‘Artificial’ Dilemma
Discussion of AI investment often focuses on identifying the best time to exit a market that has spooked more than a few observers who are concerned that we are heading for a downturn.
Analysts searching for clues to the future direction of a market often refer to stock valuations (specifically their prices in relation to profits, sales or other financial metrics), but this can be a blunt instrument.
As previously noted, US tech sector valuations remain significantly below the peaks reached during the dotcom bubble.
Another potential indicator of an overheating market is the comparative performance of various stock categories. Those who were around in the late 1990s will recall that unprofitable new stocks rose sharply in value alongside stocks of companies with little or no track record of revenue generation.
This extended period of exceptional performance from companies that have yet to become cash flow positive has not yet been replicated in the AI space, even though there are several companies in this position.
One way to monitor signs of a slowdown in AI expenditure by hyperscalers is to keep an eye on their financial reports and analyse comments made during earnings calls — a task that is, ironically, made much easier by artificial intelligence tools that can sift through large volumes of data to detect patterns.
Some analysts have taken this a stage further by looking at what the suppliers (and the suppliers of the suppliers) of companies such as Amazon, Alphabet, Meta, Microsoft and Oracle are saying to gain a broader picture of demand. Any drop in order volumes would point to issues before any useful information is forthcoming from the hyperscalers.
