We’re about to find out if the crypto market is big enough to raise the price of U.S. bonds and the dollar.
Bitcoin is up. Ether is up. And the dollar is up—a little. These things might be related if you believe, as many in the cryptocurrency world do, that the Trump Administration’s regulatory support for crypto will revolutionize digital payments.
Bitcoin was up 1.27% this morning at just under $119K per coin. ETH rose sharply by nearly 12% over the last five days. These gains came as President Trump signed the GENIUS Act, which legalizes stablecoins. Stablecoins are cryptocurrencies that maintain their value at 1:1 with fiat currency, usually the U.S. dollar.
The GENIUS Act specifically requires that stablecoins in the U.S. be backed by dollars or U.S. Treasuries. That will lock in demand for dollars and short-term U.S. bonds from stablecoin issuers, and that in turn will support both the dollar and the price of bonds.
Lo and behold, the U.S. dollar, which had been down by 10.8% year-to-date at the beginning of the month, has picked itself up and is now down only 9.39%.
It’s not yet clear whether the crypto market is big enough to push up the price of the dollar. But it might be, Laboure and Siazon say. “Tether alone holds over ~$120bn in treasury bills as of Q1 2025 and ranks amongst the top holders of US treasuries.”
“The US treasury predicts that T-bills held by stablecoin issuers (excluding interest-bearing stablecoins) will grow to ~$1trn by 2028,” they said.
“This perhaps explains why we are also seeing a rise in Ether (+25%) last week, as expectations for diminished stablecoin yields are driving interest towards Ethereum as the primary alternative for yield generation in decentralized finance,” the pair said.
Source: Fortune
