GENIUS Act Could Boost Bitcoin, Lower Treasury Yields

Chloe, a columnist for HTX DeepThink and a researcher at HTX, has analyzed the potential impact of the GENIUS stablecoin bill on the cryptocurrency market. If passed, the legislation could lower long-term US Treasury bond rates, guiding more "dollar-style" liquidity into the blockchain ecosystem. This shift could potentially bring a new round of upward momentum to Bitcoin.

Currently, the US 10-year Treasury bond yield has fallen to 4.46%, and the MOVE index has dropped to 101. The US Treasury's $40 billion bond repurchase is seen as "implicit QE," maintaining a loose funding environment. Additionally, 97% of Bitcoin addresses are in profit, with ETFs seeing a net daily inflow of $330 million. The BITO put/call ratio is only 0.40, indicating a significantly bullish market sentiment.

Chloe pointed out that if the US bond yield drops below 4.2%, BTC is expected to challenge a new all-time high. In this scenario, stablecoin payments and the on-chain financial sector, particularly the TRX and Sonic ecosystems, could see potential breakout opportunities.

The GENIUS Act, if enacted, is poised to significantly influence the stablecoin payments and on-chain financial management sectors. The legislation aims to establish a regulatory framework that enhances the stability and reliability of stablecoins, which are digital assets pegged to the value of a reserve asset, such as the U.S. dollar. This regulatory clarity could attract more institutional investors and financial institutions to adopt stablecoins for payments and financial transactions, thereby increasing their usage and acceptance in the market.

The passage of the GENIUS Act could also lead to a more robust on-chain financial management system. By setting clear guidelines for the issuance and management of stablecoins, the act could foster innovation in decentralized finance (DeFi) platforms. These platforms rely on stablecoins for various financial services, including lending, borrowing, and trading. With a supportive regulatory environment, DeFi platforms could offer more secure and efficient financial services, attracting a broader range of users and investors.

Moreover, the act could introduce more "dollar-style" stablecoins, which are backed by U.S. Treasury bonds. This could further stabilize the value of stablecoins and reduce the risk of volatility, making them more attractive for everyday transactions and financial management. The increased stability and reliability of stablecoins could also lead to a more efficient and transparent financial system, benefiting both consumers and businesses.

The potential passage of the GENIUS Act underscores the growing importance of stablecoins in the digital economy. As more people and institutions adopt digital assets for payments and financial management, the need for a regulatory framework that ensures their stability and reliability becomes increasingly important. The GENIUS Act, if passed, could provide the necessary regulatory clarity to support the growth and development of stablecoins and on-chain financial management, benefiting the broader digital economy.