Key Points
- President Trump signed the “GENIUS Act” into law, creating the first U.S. regulatory framework for stablecoins.
- Ether’s price surged to a new high for the year in response to the news.
- The law bans interest on stablecoins, likely prompting investors to turn to ether to earn yield.
- Stocks of crypto-related companies, including Coinbase and those holding crypto on their balance sheets, rallied.
Crypto-linked stocks jumped on Monday, and the price of ether hit its highest level this year, as markets reacted to President Donald Trump signing a major new law regulating stablecoins. The bill, called the GENIUS Act, passed with bipartisan support and creates the first regulatory framework for the industry in the U.S.
The new law bans paying interest on regulated stablecoins. As a result, analysts believe investors are flocking to ether as an alternative means of earning yield in the world of decentralized finance (DeFi). Banks and payment companies will also need to buy ether to pay transaction fees when using the Ethereum blockchain for their new stablecoins.
Ether was last trading at $3,816, while Bitcoin, the largest cryptocurrency, also edged up. The positive sentiment spread across the market. Crypto exchange Coinbase and stablecoin issuer Circle both saw their stocks rise.
Companies that have been adding crypto to their balance sheets also rallied, including BitMine (backed by Peter Thiel) and Bit Digital. This trend follows the playbook of MicroStrategy, a major bitcoin holder whose stock has soared in recent years.
Other cryptocurrencies also climbed, with Solana hitting its highest level since February. The rally helped push the total value of the crypto market to $4 trillion on Friday, according to CoinGecko.
