Bitwise CIO: Stablecoin Bill May Spark Multi-Year Crypto Bull Run

A Senate vote to advance a bill regulating stablecoins is being hailed as a pivotal moment for the cryptocurrency industry.

Bitwise’s Matt Hougan Says GENIUS Act Lays Groundwork for Institutional Adoption

Hougan’s latest analysis explained that the U.S. Senate voted 66–32 on Monday to move the Guaranteed Essential Neutral and Interoperable Uniform Stablecoins (GENIUS) Act toward a final vote, marking a significant development in the ongoing effort to regulate digital assets.

Sixteen Democrats joined Republicans in supporting the bill, which aims to provide a comprehensive federal framework for stablecoin issuance and oversight. The GENIUS Act requires that stablecoins be backed 1-to-1 by U.S. Treasuries or dollar equivalents. It also mandates federal registration and regular audits for large issuers and includes anti-money laundering provisions.

Hougan believes the legislation is designed to bring clarity to an area of crypto that has operated in a regulatory gray zone. The chief investment officer at digital asset manager Bitwise, called the Senate vote one of the most important developments in crypto’s regulatory history. He said it may have broader implications than the January 2024 approval of spot bitcoin ETFs, which helped normalize crypto as an investment asset class.

Hougan contends the bill could spark a sustained rally in non-bitcoin crypto assets such as ethereum (ETH), solana (SOL), and decentralized finance (DeFi) tokens like uniswap (UNI) and aave (AAVE). According to Hougan, integrating stablecoins into mainstream finance could eventually support a market exceeding $2.5 trillion.

“As excited as I am for stablecoins themselves, I think this is only the beginning,” Hougan wrote. “Once we normalize moving dollars over blockchain networks—and the largest financial institutions in the world are participating in that effort—it’s a relatively small step to moving stocks, bonds, and other financial assets over the same rails.”

The Bitwise CIO added:

This is the fundamental thesis for investing in non-bitcoin crypto assets like ethereum, solana, and the like: that $100+ trillion of financial assets will eventually move over blockchains. Passage of this bill starts that ball rolling.

If the GENIUS Act becomes law, it could represent a shift in the utility of blockchain from speculative trading to a foundational element in financial infrastructure. Hougan compared the potential impact to that of bitcoin exchange-traded funds (ETFs), predicting it would normalize crypto as a tool for financial operations and institutional use.