Bitwise Says U.S. Stablecoin Bill Approval Could Spark Long-Term Crypto Bull Market

The U.S. Senate’s recent advancement of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act has ignited optimism in the cryptocurrency industry, with asset manager Bitwise predicting it could trigger a multi-year bull market. The bill, which passed a procedural vote on May 19 with a 66-32 margin, aims to establish a comprehensive regulatory framework for stablecoins, cryptocurrencies pegged to assets like the U.S. dollar to minimize volatility.

Bitwise Chief Investment Officer Matt Hougan called the GENIUS Act a landmark development, potentially more significant than the approval of spot Bitcoin ETFs earlier this year. “This could normalize blockchain-based financial tools beyond digital currencies, driving institutional adoption,” Hougan said in a note to clients. He likened the bill’s impact to “Wall Street and crypto getting married,” suggesting it could legitimize stablecoins for mainstream financial institutions and fuel growth in blockchain networks like Ethereum and Solana, as well as decentralized finance platforms such as Uniswap and Aave.

The GENIUS Act introduces strict guidelines for stablecoin issuers, requiring 1:1 backing with liquid reserves like fiat currency or U.S. Treasuries, regular reserve disclosures, and compliance with anti-money laundering laws. Supporters argue these measures will enhance consumer protections and foster competition by allowing more issuers to enter the $248 billion stablecoin market, which is projected to reach $2.5 trillion by 2030. Currently dominated by Tether (USDT) and Circle (USDC), which hold 61% and 24% market shares, respectively, the market could see increased innovation and adoption with clearer regulations.

David Sacks, President Trump’s crypto advisor, emphasized the bill’s potential to unlock “trillions” in demand for U.S. Treasuries, strengthening the dollar’s global position. The bipartisan support, including 16 Democrats who reversed earlier opposition, signals a shift toward embracing crypto regulation, though concerns persist. Critics, including Senator Elizabeth Warren, warn that the bill could benefit Trump’s personal crypto ventures, such as World Liberty Financial’s USD1 stablecoin, raising conflict-of-interest concerns.

Despite these debates, the bill’s progress is seen as a major win for the crypto industry. It now heads to the Senate floor debate, with a final vote expected soon. If passed, it must be reconciled with a House version before reaching the President’s desk. Industry advocates, including the Blockchain Association, view the legislation as a step toward mainstreaming digital assets, potentially transforming stablecoins into a reliable tool for payments and financial instruments.