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, spoke at CNBC’s Financial Advisor Summit and expressed optimism for the future.

A Friendlier Climate for Innovation

“We’ll see a friendlier climate toward new technology in fintech, in health-care tech, in energy,” stated Tusk. His insights highlight two areas — generative AI and cryptocurrency — that may see significant developments in the coming year.

AI: A World of Unfulfilled Potential

Despite a stock runup in 2024, investment professionals have shown optimism towards companies adopting generative artificial intelligence. However, Tusk cautioned that 2025 could mark a turning point, saying, “AI is still a world right now of unfulfilled potential.” He stressed the importance of demonstrating that the technology can convert excitement into actual revenue.

The Need for Regulation

Tusk emphasized the need for stronger leadership at the federal level regarding the regulation of generative AI, stating, “We really could use some real leadership on the federal level.” This implies a crucial role for government actions in guiding the future of AI.

Cryptocurrency: A New Era?

Current regulators have not favored cryptocurrencies, as noted by Tusk, who mentioned the lack of meaningful guidance from SEC Chair Gary Gensler. However, he believes the new administration may bring about change, suggesting that the SEC and other agencies will be more favorable towards cryptocurrencies. “I think that will further allow for crypto to be traded more freely and for more innovation in this space,” he stated.

Legislative Support for Innovation

Congress has shown potential support for digital asset innovation, as demonstrated by the House of Representatives passing the Financial Innovation and Technology for the 21st Century Act (FIT21). Tusk believes that with a Republican majority in the Senate, the bill stands a fair chance of passing, thereby fostering an environment conducive to the growth and regulation of digital assets.