U.S. Senate Advances GENIUS Act, Sparking Potential Multi-Year Crypto Bull Market

Bitwise, a prominent asset manager, has released a report suggesting that the progress of the stablecoin bill in the U.S. could potentially ignite a multi-year bull market for cryptocurrencies. The Senate's recent agreement to advance the GENIUS Act to a final vote on Monday indicates that the U.S. may pass its first piece of crypto legislation this summer.

Matt Hougan, the chief investment officer at Bitwise, emphasized the significance of this development, stating that it could be one of the most important regulatory milestones in the history of crypto, potentially even surpassing the approval of spot bitcoin ETFs in January 2024. Stablecoins, which are cryptocurrencies pegged to the value of another asset like the U.S. dollar or gold, play a crucial role in cryptocurrency markets and are widely used for international money transfers.

The GENIUS Act, or the Guiding and Establishing National Innovation for U.S. Stablecoins Act, proposes federal regulation for stablecoins with a market capitalization exceeding $10 billion, with the possibility of state regulation if it aligns with federal rules. In contrast, the House of Representatives' STABLE Act advocates for state regulation without any conditions. Currently, stablecoin issuers are subject to various regulations, but there is no comprehensive federal framework. The GENIUS Act aims to provide this overarching regulatory structure.

Bitwise anticipates that the approval of the GENIUS Act could pave the way for a sustained rally in crypto assets beyond just bitcoin. The biggest beneficiaries are expected to be ether, solana, and decentralized finance (DeFi) assets such as uniswap and aave. The stablecoin market, currently valued at $245 billion, has the potential to expand significantly, possibly reaching $2.5 trillion in size.