Ether Surges 6% Against Bitcoin as GENIUS Act Ignites Yield-Bearing Stablecoin Frenzy: Analyst Breakdown

Ethereum flexes its muscles with a 6% rally against Bitcoin—just as Washington drops the regulatory hammer.

The GENIUS Act isn't just another acronym soup: It's a laser focus on yield-bearing stablecoins that could reshape crypto's risk-reward calculus. Traders are already front-running the political theater.

Meanwhile, Bitcoin maximalists grumble about 'distractions' while quietly recalculating their portfolios. Because nothing screams decentralization like waiting for congressional approval to innovate.

Thielen added that the GENUIS Act has put the spotlight on Ethena's $5 billion synthetic dollar USDe, which achieves delta-hedging or cash and carry arbitrage by shorting perpetual futures equivalent to the amount of ETH received from users as collateral. That's how it generates yield on USDe.

The long-prevailing theory is that the shorting operation adds to bearish pressures in the futures market and caps basis, the gap between futures and spot prices.

"Ethena currently represents about 4% of Ethereum’s $26 billion open interest, and by consistently selling futures, it has exerted downward pressure on ETH prices," Thielen said.

Ethena has already reached out to the U.S. Securities and Exchange Commission (SEC) to seek clarity on synthetic dollars, such as the USDe. The team reportedly argued that the synthetic dollar functions as a payment instrument rather than a security and falls outside the scope of the GENUIS Act and the STABLE Act, which regulate payment stablecoin issuers.

Ethena is headquartered in Lisbon, Portugal, with new dollar inflows primarily coming from outside the U.S. So, it remains to be seen how it fits the evolving regulatory picture in the U.S.

"If Ethena were to comply with the U.S. stablecoin bill, it could be forced to stop buying ethereum altogether. However, the market may be interpreting this dynamic differently—ENA-USDT continues to rally, supported by rising Ethereum funding rates," Thielen said.

The GENIUS Act, which got the Senate approval in June with bipartisan support, is expected to head for a floor vote in the House by Thursday.