Bitcoin has been gaining momentum in the past month, breaking through the all-time high of $110,000, but has been unable to break through effectively. The market is worried about whether there will be a double top like the end of 2021, and then turn into a bear market. StarEx exchange analysts believe that the big bull market of Bitcoin is still on the way.
On May 21, the U.S. Senate passed the procedural motion of the GENIUS Stablecoin Act by a vote of 69:31. This is the first comprehensive federal-level stablecoin regulatory framework in U.S. history. Its passage not only marks an important step for stablecoins to "take up a job with a license", but also stirs up waves on Wall Street and in the cryptocurrency world. On the one hand, bond investors expect this move to expand the scale of stablecoins and alleviate the weak demand for U.S. debt; on the other hand, the crypto market expects that institutionalized stablecoins will introduce more traditional funds to crypto assets.
Bitcoin’s big bull run has just begun.
1. Stablecoins: A bridge between U.S. debt and the crypto market
Stablecoin is a cryptocurrency that is anchored to a fiat currency and usually denominated in U.S. dollars. It is not the native asset of a chain, but a "financial plug-in" deployed on public chains such as Ethereum, Solana, and Tron through smart contracts. In May 2025, the total scale of stablecoins has reached 240 billion U.S. dollars, accounting for about 7% of the crypto market, of which USDT and USDC have a combined market value of more than 210 billion U.S. dollars, firmly occupying a dominant position.
Compared with the volatile BTC and ETH, stablecoins have become the "intermediary currency" connecting traditional finance and crypto finance with their stable value and native on-chain attributes. More importantly, in order to maintain their repayment ability, off-chain collateralized stablecoins need to be allocated with a large amount of highly liquid assets, such as bank deposits and short-term US Treasury bonds. Taking USDT as an example, its Q1 2025 audit report shows that about 66% of its assets are US Treasury bonds within 3 months, with a total amount of about US$100 billion. USDC also has a similar configuration.
In other words, stablecoins play the role of "digital carriers of US dollars" in the crypto market, but have quietly become an important part of the demand for US debt in traditional finance. Although it currently only accounts for a very small part of the US debt market, its institutional expansion potential is the core of market attention.
2. Stablecoin Act: Institutionalization Process and the New Engine of “Dollar Treasury Bondization”
The introduction of the GENIUS Act is a milestone in the compliance of stablecoins. The Act requires:
Stablecoins require federal or state licensing;
Reserve assets must be 100% covered, limited to highly liquid assets such as cash and short-term U.S. Treasury bonds;
Strict KYC/AML supervision;
Prohibit interest payments and prevent financial disintermediation;
Implement comprehensive supervision on issuers with a market capitalization of over US$10 billion.
Obviously, the bill essentially incorporates stablecoins into the "quasi-bank" regulatory framework and pushes its asset side closer to "treasury bond monetization." StarEx exchange analysts believe that once compliance opens up market space, the expansion of the stablecoin asset pool will become a new growth point for U.S. debt demand, especially in the current context of expanding fiscal deficits, reduced tax reforms, and lack of duration demand.
TBAC has predicted that the scale of stablecoins may grow to $2 trillion in the next three years. If half of it is allocated to short-term US Treasuries, it will bring an incremental demand of $1 trillion. This logic is optimistic, but from the perspective of Bitcoin, what is more worthy of attention is not whether US Treasuries can be "saved", but whether the financial structural changes brought about by the digitalization of legal currencies are inevitably pushing Bitcoin into the next narrative cycle.
3. The US debt crisis and the institutional hedging logic of Bitcoin
StarEx exchange analysts believe that the current macroeconomic background is a breeding ground for Bitcoin’s strength:
Fiscal out of control: In May 2025, the Big Beautiful Act was passed by the House of Representatives with a slight advantage, continuing the Trump-style deficit model of "cut taxes first, then cut spending". It may lead to the early release of fiscal spending in the next three years, while the cost-saving plan is nowhere in sight.
Duration pressure: Due to the continued weak market demand for US Treasuries with maturities of more than 10 years, the Treasury Department was forced to continue issuing Tbills to meet financing needs, rather than "debt duration optimization" as advocated by the former Treasury Secretary. This has led to an increase in the proportion of short-term debt, further exacerbating interest rate risks.
De-dollarization trend: As the "American exceptionalism" fades and geopolitical risks rise, more and more sovereign and private capital are seeking asset allocation paths other than the US dollar. As an anti-censorship, borderless, non-sovereign asset carrier, Bitcoin is becoming a natural candidate for this kind of safe-haven demand.
Under this situation, the introduction of the stablecoin bill seems to be good for US bonds, but in fact it exposes the increasing dependence of the US dollar system on digital tools, and this dependence may eventually lead to a big bull market in Bitcoin.
Why do I say that? Because the legalization of stablecoins is actually a "crypto extension" of the US dollar monetary system, a "shadow extension" of the digital dollar. It is this extension that guides global on-chain liquidity into US dollar assets, which in turn triggers distrust of US finances from US dollar assets, and ultimately stimulates the market to seek a new anchor other than the on-chain dollar: Bitcoin.
4. The big bull market is still on the way: Bitcoin’s new narrative space has opened up
Every bull run in crypto assets has its own macro narrative background:
2013 bull market: Cyprus banking crisis, Bitcoin attracted attention as a "de-banking" asset;
2017 bull market: ICO and Ethereum smart contract innovation drove capital influx;
2021 bull market: driven by the Fed’s massive money printing + NFT + DeFi;
Bull market in 2024-2025: This may be the era of "Bitcoin vs. U.S. Treasury Credit".
Analysts at StarEx Exchange believe that this round of Bitcoin rise is not entirely based on technological innovation, but stems from a systemic distrust: the continued decline in demand for U.S. Treasury bonds, the expansion of fiscal deficits, short-term interest rate manipulation, involuntary selling of long-term interest rates, and pessimism about institutional solutions.
If the Stablecoin Act promotes the expansion of stablecoins, it will only further deepen the market's structural anxiety about the "ultimate implosion of the US dollar system." When this anxiety cannot find a release outlet in the capital market, it will naturally flow to Bitcoin.
