Coinbase stock surges 16% on a fresh wave of momentum from landmark crypto bill
Shares of Coinbase spiked on Wednesday, with the largest US crypto exchange riding a wave of bullishness created by the Senate's passage of the GENIUS Act this week.
The stock rose as much as 17% to $297.44, before paring gains slightly. The rally vaulted the shares to a year-to-date gain of 20%. Meanwhile, shares of recently public stablecoin issuer Circle gained 34%.
The Senate bill passed on Tuesday aims to establish a regulatory framework for stablecoins, ultimately paving the way for their more widespread use and issuance by more companies.
Stablecoins are a type of crypto intended to hold their value steady against fiat money like the dollar. They're backed 1:1 by liquid reserves, such as dollars or cash equivalents like Treasurys.
Stablecoins are Coinbase's second-largest revenue driver, directly behind crypto trading, its first-quarter earnings showed. But the company's exposure to the stablecoin market is even higher, as Coinbase is a cofounder of USDC, a popular stablecoin, and receives 50% of the "residual payment base" that its issuer Circle generates from reserves.
Circle recently made its trading debut on the New York Stock Exchange, making a splash as one of the year's first major tech IPOs. The newly minted stock rose by as much as 238% on its first day of trading.
While the momentum from the Circle IPO has ebbed, it is still up almost 120% in the past month, surging 20% following the news that the Senate passed the GENIUS Act.
Stablecoins have even received support from the president, whose family has backed World Liberty Financial. The digital asset firm launched its USD1 stablecoin earlier this year.
Circle's big IPO success is an indicator that Wall Street has begun taking stablecoins, and the broader crypto space, more seriously.
Even some crypto detractors may be getting more comfortable with the assets. Jamie Dimon has been a vocal critic of cryptocurrencies, but this week, JPMorgan announced it would launch JPMD, a stablecoin-like token for institutional clients.
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- Yahoo
Crypto stocks soar after Senate passes stablecoin bill, Circle up over 50%
Shares of the first publicly-traded stablecoin company Circle continued to surge on Friday after the Senate passed legislation that would establish a regulatory framework for stablecoins, a type of cryptocurrency designed to maintain a value in line with the U.S. dollar, earlier this week. Shares of Circle are up 53%, soaring from $148 to $227, since the market opened on Wednesday after the legislation passed in the Senate on Tuesday night. Shares of other crypto-related companies increased on the news with Coinbase, the leading crypto exchange in the U.S., gaining 20% since Wednesday. The legislation, known as the GENIUS act, is a first-of-its-kind bill that would establish regulations and consumer protections for stablecoin companies, including full reserve backing, monthly audits, and anti-money laundering compliance. After passing in the Senate, it will be sent to the House of Representatives for a vote and potential revisions. Circle issues USDC, the second-largest stablecoin by market cap behind Tether's USDT. Circle CEO Jeremy Allaire expressed his support for the bill in a post on X after the Senate vote on Tuesday night. 'History is being made, as the US Senate passes the GENIUS Act, taking us one step closer to breakthrough legislation being signed into law that will drive U.S. economic and national competitiveness for decades to come,' he wrote. The surge in Circle's stock price comes weeks after the company's debut on the stock market under the ticker CRCL. After pricing its shares at $31, CRCL opened on the New York Stock Exchange at $69. Within its first day on the market, the company's shares soared to a high of $103.75 before closing at $82.23, showcasing strong retail demand for access to the stablecoin industry. Since 2021, stablecoins have become increasingly popular outside of the U.S. as a means to settle cross-border transfers and protect assets against inflation. Crypto firms, however, have long complained that the U.S. stablecoin industry has been hindered by a lack of clear regulations, especially under Biden-era Securities and Exchange Commission (SEC) chair Gary Gensler who initiated dozens of investigations and enforcement actions against crypto companies. The Senate's passage of the GENIUS act was aided by President Donald Trump's vocal support of the broader crypto industry. In addition to pushing for Congress to pass the stablecoin bill, Trump has established a national Bitcoin reserve, pardoned crypto criminal Ross Ulbricht and appointed SEC officials that have ended a number of lawsuits against crypto companies. With support from the U.S. president and increasing regulatory clarity, mainstream corporations are considering implementing them into their payment structures, including Meta, Google, AirBnB and X. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
24 minutes ago
- Associated Press
Senate parliamentarian deals blow to GOP plan to gut consumer bureau in tax bill
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Yahoo
34 minutes ago
- Yahoo
What the GENIUS Act Means for Stablecoins and Advisors
Who wouldn't like a little more stability in their life? In the chaotic world of crypto, at least, some may be on the way. The Senate approved a regulatory framework for stablecoins, dubbed the GENIUS Act, this week. The bill, which has yet to be passed by the House of Representatives, would require tokens to be backed by liquid assets including the US dollar and short-term Treasurys, and issuers would have to publicly disclose composition of their reserves each month. Despite crypto's roughly $3.4 trillion global market cap and even President Trump championing digital assets, they still remain divisive for advisors. While some are comfortable allocating up to 10% of a client's portfolio to crypto products, others wouldn't touch them with a 10-foot pole. However, if the stablecoin bill becomes law, it could bring a greater sense of legitimacy and clarity to the asset class. 'This stablecoin framework, if it sticks, is the first adult move we've seen from Washington in a long time,' said Christopher Haigh, CEO of Iconoclast Capital, adding that his firm is very crypto-forward. 'We're finally talking about guardrails instead of hand-wringing.' READ ALSO: Why UBS Is the Only Wirehouse to Allow Podcasting and How Advisors Can Avoid Becoming Over-Reliant on AI Because stablecoins outlined in the framework would be backed by the dollar or Treasurys, some advisors might be questioning the point: Why not just hold cash or government bonds? However, stablecoins should be viewed less as investments that bring returns and more as a means of doing business, said Campbell Harvey, Duke University professor and Research Affiliates partner. 'Within 12 seconds, you can transfer money anywhere in the world,' he told Advisor Upside. 'There is a role to diversify portfolios, and stablecoins enable that and serve to reduce transaction costs.' He added that advisors place themselves at a disadvantage by ignoring the sheer size of the cryptomarket, including the stablecoin sector. The biggest stablecoins include: Tether, with more than $155 billion in market value; USDC, with more $61 billion; and USDS, with more than $7 billion. Stablecoins' cheap trading costs and automatic accounting on blockchain ledgers make them incredibly attractive to companies and banks, Harvey added. 'Expect to see an explosion in the number of stablecoins,' he said. 'I can't imagine a large bank not initiating a stablecoin.' Natural Selection. It might be easy to think of crypto as only Bitcoin and 1,000 other altcoins with goofy names that operate more like Texas Hold'em than actual stores of value. But in an increasingly digital world, stablecoins are just the next step in managing portfolios, said David LaValle, global head of ETFs at Grayscale. 'There's this common, quick gut reaction that I sometimes get from people that say: 'Oh my gosh, these stablecoins are a real risk to the government, to e-bills or to money market funds in the US,'' he said at the Wealth Management EDGE conference in Boca Raton, Florida, last week. 'It's going to be a really efficient place to park your money, and it's just a natural way to go.' This post first appeared on The Daily Upside. To receive financial advisor news, market insights, and practice management essentials, subscribe to our free Advisor Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
