Ether Races 6% Against Bitcoin as GENIUS Act Puts Spotlight on Yield-Bearing Stablecoins: Analyst
Ethereum’s ether (ETH) is outperforming bitcoin (BTC), driven by anticipation surrounding the GENIUS Act, a U.S. stablecoin bill poised for House approval. This bill is expected to restrict interest-bearing stablecoins, potentially boosting Ethereum’s role in the digital asset ecosystem, according to Markus Thielen of 10x Research.
The ether-bitcoin ratio surged over 5.96% on Tuesday, its best performance since May 13, reaching 0.02670. Simultaneously, ether’s dollar price exceeded $3,100 for the first time since February, marking a significant increase of over 4%.
Thielen highlights Ethena’s USDe synthetic dollar as a key factor. Ethena, with approximately 4% of Ethereum’s $26 billion open interest, uses delta-hedging and arbitrage strategies involving shorting ETH futures to generate yield. This, according to Thielen, has historically exerted downward pressure on ETH prices.
However, the GENIUS Act’s potential impact on Ethena is creating a complex market dynamic. While Ethena has contacted the SEC to clarify USDe’s status as a payment instrument rather than a security, the market interprets the situation differently. The continued rally of ENA-USDT, coupled with rising Ethereum funding rates, suggests that the market may believe Ethena is not at risk despite the potential restrictions. Ethena, not operating in the US, may not be affected by the GENIUS act, even if enforced.
Ethena’s financial performance is robust, with nearly $300 million in revenue over the past year and $15 million in fee revenue last month, placing it among top earners in the crypto space. This strong performance, combined with rising funding rates, is expected to further attract investment into Ethereum, potentially driving increased inflows into Ethereum ETFs, according to Thielen. The GENIUS Act’s upcoming House vote is expected to further shape this evolving market landscape.
