An exterior view of the New York Stock Exchange on September 18, 2024 in New York City.
Stephanie Keith | Getty Images
As the calendar turns to a New Year and a new presidential administration, many investors are wondering where they can earn above-average returns.
The current outlook is positive, with continued interest rate cuts and incoming regulators in President-elect Donald Trump’s administration who are expected to be more friendly to markets, business and technology, venture capitalist Bradley Tusk, co-founder and managing partner of Tusk Venture Partners, said Tuesday at CNBC’s Financial Advisor Summit.
“We’ll see a friendlier climate toward new technology in fintech, in health-care tech, in energy,” Tusk said.
Two areas — generative AI and cryptocurrency — may be poised for new developments next year, he said.
AI still a world of ‘unfulfilled potential’
Amid the stock runup of 2024, many investment professionals have been bullish on companies that have adopted generative artificial intelligence.
But 2025 could mark the start of a turning point, Tusk said.
“AI is still a world right now of unfulfilled potential,” he said.
Companies that are heavily invested in this area will likely keep investing. Despite the exciting talk of the technology’s use for everything from creating new drugs to teaching children or discovering minerals, it still has to show the economics work, too, Tusk said.
“At some point it has to go from a cool search engine and some really exciting potential ideas to actual revenue or actual saving,” Tusk said.
When it comes to regulation of generative AI, “we really could use some real leadership on the federal level,” Tusk said.
Crypto may be ‘traded more freely’
Current regulators — specifically Securities and Exchange Commission Chair Gary Gensler — have not looked favorably on cryptocurrencies and therefore not provided meaningful guidance, Tusk said.
The new administration may usher in a different tone toward cryptocurrencies, he said.
“I do think that whoever we’re going to see at the SEC, CFTC [Commodity Futures Trading Commission], Treasury, all the various agencies are going to be a lot friendlier to crypto and just a lot more reasonable,” Tusk said.
Congress may also help, he said. In May, the House of Representatives passed the Financial Innovation and Technology for the 21st Century Act, also known as FIT21. Its goal is to help digital asset innovation to grow with consumer protection and regulatory certainty.
The bill has a “pretty good chance of passing the Senate now,” Tusk said, especially with 53 Republican senators.
“I think that will further allow for crypto to be traded more freely and for more innovation in this space,” Tusk said of the prospective legislation.