Cryptocurrency Market Surges 40% to 4 Trillion Dollars on U.S. Stablecoin Legislation

The total market value of cryptocurrencies has surpassed 4 trillion dollars for the first time, driven by the rise in token prices and legislative efforts in the United States to regulate the industry. This milestone comes as the U.S. Congress passed the first federal legislation to regulate stablecoins, a type of cryptocurrency pegged to the U.S. dollar. The legislation, which received bipartisan support and the backing of the U.S. President, aims to legalize the 265 billion dollar market for stablecoins, which can be circulated across platforms 24/7. The legislation is expected to bring stability and legitimacy to the market, which is projected to grow to 37 trillion dollars by 2030.

The surge in the cryptocurrency market was led by tokens other than Bitcoin. Ethereum, for instance, saw a 22% increase over the past five days. Bitcoin, the benchmark asset for the industry, reached a record high of 123,205 dollars earlier this week. Other notable gains include Uniswap, which surged 24%, and Solana, which rose 6.5%. The passage of the stablecoin legislation is seen as a significant step towards greater regulatory clarity and investor confidence in the cryptocurrency market. The legislation requires stablecoin issuers to hold dollar reserves on a 1:1 basis and prohibits technology giants from issuing their own stablecoins. This move is expected to foster a more transparent and secure environment for stablecoins, which are increasingly being used for transactions and as a store of value. The legislation also aims to prevent market manipulation and ensure that stablecoins are backed by sufficient reserves, thereby protecting investors and maintaining the stability of the financial system.

The passage of the legislation is a positive development for the cryptocurrency industry, as it provides a clear regulatory framework that can foster innovation and growth while protecting investors. The legislation is expected to have a significant impact on the market, as it provides a clear path for the legalization and regulation of stablecoins, which are a key component of the cryptocurrency ecosystem. The legislation is also expected to have a positive impact on the broader financial system, as it provides a clear regulatory framework for stablecoins, which are increasingly being used for transactions and as a store of value. The legislation is a significant step towards greater regulatory clarity and investor confidence in the cryptocurrency market, and it is expected to have a positive impact on the market in the long run.

Investors continue to pour into cryptocurrency exchange-traded funds (ETFs) listed in the United States. Since July, Bitcoin funds have attracted 55 billion dollars in inflows, while Ethereum ETFs have drawn in 29 billion dollars. The stable pricing trend observed since the launch of Bitcoin ETFs suggests that the recent price surge is within normal parameters. If the current inflow of funds continues, even during the typically slower summer months, Bitcoin could break the 140,000 dollar mark in September and potentially surge to 150,000 dollars by early October. The strong demand for Bitcoin is evident in the high volume of open interest in options contracts expiring on August 1st with a strike price of 130,000 dollars. On Friday, the price of Bitcoin remained relatively stable, hovering around 119,570 dollars.