In a groundbreaking development for the cryptocurrency sector, President Donald Trump has enacted the GENIUS Act, which represents the first significant federal legislation aimed at regulating digital assets. This law, which received bipartisan support after being passed by the Senate last month and by the House of Representatives just yesterday, establishes a robust framework for stablecoins that are backed by the US dollar. The legislation is viewed as a crucial milestone for the crypto industry, as it brings much-needed legal clarity for stablecoin issuers while reinforcing the dollar’s pivotal role in the evolving digital economy. Key figures in the industry and lawmakers have praised this move as a significant advancement for innovation and the modernization of financial systems. The GENIUS Act is designed to promote the creation of fully reserved, off-chain backed stablecoins, which aims to offer a secure and transparent entry point for both users and institutions.
Experts anticipate that this legislation will accelerate the acceptance of dollar-denominated digital transactions and pave the way for the development of on-chain financial infrastructure. With the regulatory framework now established, many believe that the US crypto market will experience rapid growth, starting with stablecoins but extending into broader areas of the sector. This development signifies a key moment in positioning the United States as a leader in the global digital finance landscape.
DeFi Set to Gain from GENIUS Act Unlocking On-Chain Expansion
Jake Chervinsky, the Chief Legal Officer at Variant Fund, a well-known venture capital firm specializing in cryptocurrencies, recently shared his insights on the potential effects of the GENIUS Act. Although the act primarily regulates centralized stablecoins with full reserves held off-chain, Chervinsky suggests that its consequences for decentralized finance (DeFi) could be significant. He stated, “The GENIUS Act isn’t directly about DeFi — it regulates centralized stablecoins with full reserves off-chain. But it is very good for DeFi — the more dollars and people there are on-chain, the more need there will be for on-chain finance of all kinds.” This viewpoint underscores a broader shift: regulations that support safer and more transparent stablecoins may lead to an increased influx of capital and users into the crypto realm. With a greater volume of regulated digital dollars entering the on-chain space, the infrastructure that underpins lending, trading, and yield generation in DeFi is likely to expand considerably. Chervinsky’s assertion that payments serve merely as an introductory phase highlights the concept that once users engage in on-chain transactions using stablecoins, transitioning to more sophisticated financial instruments becomes a more intuitive process. As Bitcoin hovers around $117,000 and Ethereum approaches the $3,500 mark, these legislative changes are contributing to a bullish sentiment in the market. The upcoming weeks could be pivotal as both BTC and ETH test new thresholds, buoyed by growing institutional interest and favorable regulatory changes in Washington.
Crypto Market Rallies Towards Multi-Year Resistance
The overall cryptocurrency market capitalization, excluding Bitcoin (TOTAL2), has made a significant upward move, reaching $1.45 trillion with strong trading volume. This represents an 11.58% increase over the past week, bringing the market to heights not observed since early 2024. This surge indicates a revived interest in altcoins, with Ethereum leading the way through a remarkable 131% increase since April. The price action on the weekly chart illustrates a decisive break above the 50-week and 100-week moving averages ($1.13 trillion and $987 billion, respectively), with bullish momentum gaining traction. The 200-week moving average at $879 billion has provided substantial long-term support during the recent consolidation, setting the stage for this breakout. The current rally is now focused on the next significant resistance level, which lies between $1.6 trillion and $1.7 trillion, the market’s previous peak before a sharp downturn. Increased trading volume supports the strength of this breakout, suggesting that institutional investments may be returning. If TOTAL2 can sustain its upward trajectory, the altcoin market could experience a broader rotation and rally. However, investors should remain vigilant for potential profit-taking or corrections, especially near critical resistance levels. A weekly close above $1.5 trillion would further reinforce the bullish trend and create opportunities for new cycle highs among major altcoins.
