Tens of trillions of dollars in untapped potential.
With each passing month, we see more bullish signals emerging in this space.
– Bitcoin continues to close above $100,000 resistance level; 44 consecutive days and counting!
– Institutional interest in BTC continues to surge, with a growing list of Bitcoin treasury companies, each snapping up as many coins as possible.
– Bitcoin surpassed 1.4 billion unique (cumulative) addresses last month since launching in 2009. For context, it took nearly seven years to hit 100 million BTC addresses.
And for the focus of today’s piece, the combined stablecoin market cap shows no sign of slowing down, hitting $236 billion (with CoinGecko listing this at $262 billion) and counting.
Best of all, we’re just getting started.
The Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 Act, commonly known as the GENIUS Act (S.1582), received the all-clear earlier this month after the U.S. Senate voted 68 in favour of it to 30 against it.
What is the GENIUS Act?
One of the most discussed pieces of legislation in our industry over the past year, this act introduces an extensive set of regulations for USD-pegged stablecoins.
Some notable examples include:
– Issuers with a market cap above $50 billion will be legally obligated to provide annual audited financial statements. Tether and Circle are the only ones that fit into this category.
– Creating more possibilities for quicker and cheaper international payments.
– A requirement to have a 100% reserve backing with USD, short-term Treasuries or other liquid assets as specified by the main regulator.
– It will be highly unlikely ever to see something akin to the 2022 Terra Luna collapse, even if separate rules for algorithmic stablecoins are established down the track.
Of course, we have had permissionless options, such as Bitcoin, XRP Ledger, and Ethereum, for several years now to do this. Still, I’m all for system-wide improvements, particularly for settling payments in fiat.
Moreover, Approved stablecoins are not securities under the related legislation.
The lack of clarity surrounding these fiat-backed digital assets has held back related firms until now, as there has been uncertainty about their classification — whether as a security, commodity, or payment instrument —depending on whom you ask between the SEC, CFTC, FinCEN, and other government departments.
Before proceeding, some may wonder why many in the space are excited about the prospects of stablecoins.
Shouldn’t we focus on Bitcoin and a handful of altcoins?
Yes, but it boils down to injecting liquidity in the space that will directly benefit these crypto assets.
This is most evident by looking at trends with Tether USD (USDT)’s historical market cap since inception.
It increases sharply in the lead-up to or during a bull cycle, whereas it pulls back or plateaus once the market turns bearish.
USDT historical market cap. Source: CoinGecko.
Notice how it has only continued increasing despite BTC being about 10% below its all-time high (ATH), despite geopolitical tensions and ongoing concerns about tariffs since Trump’s return to the White House.
As long as the stablecoin market cap continues to rise, keep calm and continue stacking sats.
USDT isn’t the only stablecoin showing strength. USDC’s market cap is also performing well, eclipsing $60 billion on the back of Circle’s recent public listing.
Circle’s scintillating price performance
Following extensive hype, Circle Internet Group (CRCL), the issuer of the USDC stablecoin, made its debut on the New York Stock Exchange earlier this month.
And boy, what a run it has had, going from $31 per share at launch to over $240 in less than three weeks.
While it’s unlikely to see this impressive run continue to the same extent as its opening weeks, I expect plenty of growth in the years to come for the world’s second-largest stablecoin issuer.
Coinbase’s stock is also regaining momentum after the GENIUS Act was passed. COIN’s price returned above $300, rapidly hitting a new ATH of $369 on the back of this news and Circle’s public launch.
For context, Coinbase co-founded Circle and receives 50% of the latter’s residual revenue from reserves used as collateral for the USDC stablecoin.
Consider TradingView’s forecast data to see what analysts say about CRCL, COIN and other shares to help you gauge buying and selling opportunities.
As always, do your due diligence and seek information from various reliable sources.
Additional thoughts
While Circle will continue to thrive due to growing stablecoin adoption worldwide, especially with the thousands of stablecoin/crypto trading pairs across hundreds of exchanges, it is essential not to disregard the rising competition in this space.
Over the past 12 months, we’ve seen more integration of PayPal USD (PYUSD), the publicity and sharp uptick of World Liberty Financial’s USD1, with a $2B market cap just weeks after launching, FDUSD, the launch of Ripple’s first stablecoin, RLUSD, and the steady growth of Ethena USD (USDe)*.
*Strictly speaking, USDe is a synthetic dollar, not a stablecoin, as explained here.
Following this regulatory clarity for stablecoins, many countries will monitor the progress in the USA and assess how they can benefit from these pegged digital assets, especially other large economies such as the EU, the UK, and Japan, as well as China and the other BRICS nations.
Although the central bank digital currency (CBDC) narrative has gradually faded over the past 12 months, entities such as the European Central Bank (ECB) continue to advocate for developing a digital euro to address the growing popularity of USD-based stablecoins in Europe.
“The case for a CBDC is especially strong for a monetary union, especially in the context of a fragmented and externally-dependent payments system.”
Philip R. Lane, Member of the Executive Board of the ECB, University College Cork Economics Society Conference 2025
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Does this threat pose a risk to stablecoins, Bitcoin and altcoins?
No, because:
Stablecoins, particularly USDT, have demonstrated considerable resilience over the years. Remember all the concerns people had about Tether regarding the lack of auditing of their reserve assets?
In March, Tether CEO Paolo Ardoino announced that the stablecoin issuer was in talks with a Big Four accounting firm to conduct a comprehensive audit of its reserves. A partnership with one of these companies—Deloitte, PwC (PricewaterhouseCoopers), EY (Ernst & Young), or KPMG—would allay concerns about a suspected lack of transparency.
According to the latest audit by BDO Italia, as of December 31, 2024, Tether Holdings managed approximately $94.4 billion in U.S. Treasury bills as part of its $118.33 billion in cash, cash equivalents, and other short-term deposits. The stablecoin issuer also has over $7.5 billion of BTC on its balance sheet.
– Bitcoin remains the most decentralised and secure blockchain on the planet. Its reputation as the longest-standing distributed ledger network only adds to its merits.
CBDCs are unlikely to threaten Bitcoin, as they mostly appeal to people who do not intend to use BTC.
– A handful of altcoins and their respective networks will also thrive. Many operate as smart contract platforms, particularly Ethereum, Solana, and BNB Chain, or as gross-payment settlement systems, such as XRP.
Ironically, some of these will likely host CBDCs in the coming years. There have been articles about Ripple’s collaboration with central banks and similar entities, such as the Digital Euro Association, to further CBDC development, which is likely to involve the XRP Ledger.
However, Ripple appears to be adjusting its public stance on CBDCs, particularly in the United States, following Donald Trump’s return to the White House and his administration’s opposition to CBDCs.
Part of this recalibration would also be due to the December 2024 launch of its Ripple USD (RLUSD) stablecoin.
Beyond the USA and Europe, Chinese e-commerce giant JD.com Group is actively seeking to participate in the stablecoin space, signalling its intention to apply for related licences worldwide. It reportedly wants to reduce global cross-border payment costs by 90% and increase efficiency to within 10 seconds.
With clearer crypto regulations, hundreds of billions of dollars will continue to be invested in this sector annually.
This growth rate will eventually accelerate to trillions of dollars annually, especially as more people begin to understand how Bitcoin, blue-chip altcoins, and stablecoins will transform our world, particularly the incumbent system, which remains inefficient despite gradual improvements.
What upcoming stablecoin-related announcements or news are you looking forward to most? Comment below.
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Disclaimers
- This blog post is for informational purposes only. It is not financial, legal, or investment advice. You are ultimately responsible for your decisions.
- My opinions in this piece may not reflect those of any news outlet, person, organisation, or entity listed here.
- Please do sufficient research before investing in any cryptocurrency assets, staking, NFTs, or other products associated with this space.
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