In the month of July, a major piece of crypto news broke: the passing of the GENIUS Act. In a move seen as a step toward greater cryptocurrency adoption, the marketplace has seen an overall positive response.
As a result, the overall crypto market capitalisation recently surpassed $4 trillion. What does this mean for the market? Where does the growth end, and how does the GENIUS Act play into all of this? A deeper dive will provide greater clarification.
What is the GENIUS Act?
The Guiding and Empowering Nation’s Innovation for US Stablecoins Act, or the GENIUS Act, is the first federal law in the United States with a focus exclusively on payment stablecoins. The hope is that this will pave the way for a “digital asset revolution”, with the United States at the forefront.
The Act itself was signed into law on July 18, 2025, by President Donald Trump. Within the act is governance and a set of strict requirements pertaining to who can issue stablecoins. It also covers required disclosures and how the stablecoins are to be backed.
Why the GENIUS Act Was Necessary
Prior to the passing of this law, stablecoins were mostly a grey zone, legally speaking. They were used quite a bit but mostly unregulated, at least at the federal level. With steady growth, stablecoins have become a major market of their own. By mid-2025, stablecoins carried a total value of $230 billion.
Concerns from lawmakers regarding stablecoins have been around for some time. For example, concerns about potential systematic financial risk posed by unregulated issuers. There was also the concern over a lack of redemption guarantees, consumer protections, and potential competition from foreign-issued stablecoins.
Speaking of the latter, an action by the European Union may have been a driving factor. It created a unified regulatory framework, Markets in Crypto-Assets (MiCA), that could have potentially given EU-issued stablecoins a distinct competitive advantage. The move also would have upped the pressure on U.S. regulators to gain ground.
The goal of the GENIUS Act is to fix all of those issues through a national crypto rulebook. The act will provide a clear framework for U.S. stablecoin issuers, offering strict consumer protections like independent audits and full asset backing. More importantly, there will be a pathway for licensing for banks and qualified non-banks through the Office of the Comptroller of the Currency (OCC). Finally, there will be exclusions made for “non-payment” tokens, which will be studied separately.
What the $4 Trillion Market Cap Entails
Market capitalisation can be a bit misleading. So, what’s actually happening within that $4 trillion market cap? For starters, Bitcoin is doing the heavy lifting as essentially the central point for the entire marketplace. Bitcoin possesses more than half of the total crypto market cap, with roughly $2.4 trillion.
Though Bitcoin is a major piece of the total cryptocurrency market capitalisation, it isn’t the only one. Ethereum, for instance, has roughly 13% of the market, mostly because of its role as the default smart contract platform that most institutions use to access spot exchange-traded funds (ETFs).
Next is Solana, which has quietly evolved into a top-tier asset. Its market cap is right around $100 billion, which is nothing to sneeze at even if it isn’t on the same level as Bitcoin and Ethereum. XRP has a $193 billion market cap, mostly because of renewed investor interest, institutional investor adoption, and international payment adoption.
At the end of the day, Bitcoin is the ultimate driving factor behind the cryptocurrency market. As more major institutional adoption happens, XRP, Solana, and Ethereum continue to carve out larger pieces of the pie. All of that only serves to increase their importance to the cryptocurrency market.
Can the Crypto Marketplace Keep its Positive Momentum?
The question that everyone asks is, “Can crypto continue its climb?” We have seen crypto booms before only to be followed by massive falls, particularly for altcoins. The good news for investors is that there are plenty of signs to indicate that the crypto market will continue to gain value in the next few months.
Liquidity and “Easy Money”
For starters, cryptocurrencies thrive on liquidity. On a global scale, liquidity has seen a substantial increase. A number of major central banks are also easing their monetary policies, tilting dovish or reducing interest rates in the wake of a more aggressive tightening cycle. There is even the expectation that the U.S. Federal Reserve will cut rates as soon as September. The European Central Bank (ECB) has repeatedly cut interest rates since the middle of 2024. In August, the Bank of England cut rates down to 4%.
While “easy money” doesn’t necessarily guarantee a surge in crypto prices, it has historically been a helpful factor for riskier assets. Speaking of risk, major regulatory clarity provided by the GENIUS Act helps ease consumer and institutional apprehension.
Reducing Structural Frictions
Structural frictions have been removed, leading to more major financial institutions finally embracing cryptocurrencies. On top of that, the Securities and Exchange Commission (SEC) has not only approved but also expanded its toolkit for the growing exchange-traded products (ETPs) market. This includes allowing redemptions and in-kind creations for select crypto ETPs. That detail reduces costs for larger investors, a major plus for institutional investors.
Corporate Treasuries
Finally, there is the matter of corporate treasuries. Many companies have emerged recently with the sole ambition of buying up and holding tokens like Ethereum, XRP, Solana, and Bitcoin, with select altcoins included. With fewer tokens available on the open market, prices tend to surge.
In the end, there are several suggestions that the cryptocurrency marketplace can continue to grow. With major ETF inflows of late, the future looks strong. It is important that investors remain somewhat wary about investing more than they would have otherwise, and there is always the chance that a downturn could happen.
What the GENIUS Act Means for Retail Investors
In the wake of the passing of the GENIUS Act, markets were shaken but have since stabilised. Major public crypto firms Robinhood and Coinbase seemingly welcomed the move, with Coinbase CEO Brian Armstrong referring to it as “a financial revolution”.
While this is clearly a major move for institutional investors, it may be wiser for decentralised finance (DeFi) protocols and small stablecoin projects to be cautious. With increased compliance costs, not to mention fewer paths to legal operation, there are more challenges to contend with.
For everyday users and crypto investors, the GENIUS Act looks to be a means of delivering both assurance and safety. It is easy to know whether a stablecoin you are considering is backed 1:1 by a real liquid asset or cash, plus it will be easier to know if the issuer operates under federal supervision.
The lone challenge for investors is that some decentralised stablecoins or yield-bearing stablecoins could become either heavily restricted or unavailable altogether under the new regulatory framework, potentially limiting options for investors.
