Genius Act propels value of stablecoins as exchange-traded funds prove their value
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Things can change quickly in cryptoland. Two weeks ago, Bitcoin jumped from $108,000 to an all-time high of $123,000 in just a few days. On Friday, the price suddenly dropped to $114,750, and Bitcoin was swapped for Ether, the second-largest coin on the market.
The price of Ether is rising sharply, repeatedly approaching the magical $4,000 mark – a 50% increase in just two weeks, with hardly any serious corrections along the way.
Ether is benefiting from positive news surrounding US crypto legislation and the expectation that Ethereum exchange-traded funds (ETFs) will soon be allowed to add staking. Staking means locking up your crypto coins to help secure and validate a blockchain network – in return, you receive rewards. It’s a way to earn passive income with crypto.
The recent approval of the Genius Act (signed by Donald Trump) also provides clear regulations for stablecoins that are, for example, pegged to the dollar. This strengthens the role of Ethereum, as most stablecoins run on this platform.
The platform also offers unique advantages over the BTC blockchain: in addition to staking, for example, it supports smart contracts and tokenisation.
Inflow into Ether crypto funds has been higher than inflow into Bitcoin ETFs over the past two weeks. More and more companies are also choosing to hold Ether as a reserve, alongside or instead of Bitcoin. BitMine Immersion Technologies began in June with an initial investment of $250 million in Ether and has now accumulated more than $1 billion. The company’s share price has risen by more than 480% this year.
The Ether Machine, an investment vehicle, aims to obtain a Nasdaq listing via a so-called SPAC (special purpose acquisition company) and already manages around 400,000 Ether ($1.5 billion).
Companies such as SharpLink Gaming, Bit Digital, and GameSquare each hold more than $100 million in Ethereum reserves. Tom Lee of Fundstrat, who is chairman at BitMine, aims to buy and stake 5% of the total supply.
Ark Invest, the investment firm led by Cathie Wood, sold $12 million worth of shares in US-based Coinbase. Ark has started investing in Bitmine Immersion Technologies, a company that is also buying large amounts of Ethereum.
Asset manager Galaxy Digital, owned by billionaire Mike Novogratz, also surprised the market with a notable selling spree. Novogratz is said to have sold $900 million worth of Bitcoin, after which another $600 million in Bitcoin was dumped and Ether was bought instead.
Not only Ether, but some alt ecoins are also seeing significant gains after a long period of losses. As a result, Bitcoin dominance in the market is declining.
Knowledge platform Bitcoin Alpha outlines a scenario of a transition to a new regime in which Bitcoin rises, but many altcoins rise even faster. This would mark the start of the manic phase of the bull market.
The old bitcoiners have already sold what they wanted to sell, but for altcoin holders, it’s a different story. They are still waiting for prices above the 2021 peak and will provide significant additional supply when that happens.
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