Bitcoin and altcoins soared on Thursday, defying a broader U.S. market downturn, as investor sentiment strengthened following the passage of groundbreaking cryptocurrency legislation and ongoing economic concerns.
Bitcoin (BTC) rallied 3.24% to reach an all-time high of $111,860, pushing the total cryptocurrency market capitalization to $3.5 trillion. The surge came even as the Dow Jones Industrial Average opened nearly 100 points lower, extending Wednesday’s sharp 816-point drop, underscoring diverging investor strategies between traditional and digital assets.
GENIUS Act Fuels Crypto Optimism
The rally was largely triggered by the passage of the GENIUS Act (Guaranteed Electronic Nationally Issued Utility Stablecoin), a first-of-its-kind regulatory framework focused on stablecoins. The legislation mandates 100% reserve backing for all stablecoins using high-quality, liquid assets such as U.S. Treasuries and cash. Issuers must also provide monthly disclosures revealing the full composition of their reserves.
Under the new law:
- Stablecoin issuers with over $10 billion in assets will be regulated at the federal level.
- Issuers with less than $10 billion will fall under state supervision.
- Both levels of oversight aim to enhance consumer protection and market integrity.
Analysts believe the GENIUS Act addresses long-standing concerns in the crypto space, especially following the Terra collapse in 2022 and the high-profile implosion of FTX. The law is being hailed as a pivotal moment, bringing legal clarity and institutional confidence back to the market.
Bitcoin as a Safe Haven Amid U.S. Economic Uncertainty
Adding to the bullish momentum is the rising perception of Bitcoin as a safe haven asset. This follows Moody’s recent downgrade of the U.S. credit rating, citing rising debt levels, surging interest payments, and volatile fiscal policy.
Notably, the House of Representatives recently passed a sweeping tax package dubbed the “big, beautiful bill” — which is projected to add another $3.8 trillion to the national debt. The bill includes extended tax cuts, expanded child tax credits, and new senior relief measures.
These developments have led investors to reduce exposure to U.S. equities and government bonds. The U.S. Dollar Index has fallen to 99.6, while the 10-year Treasury yield spiked to 4.6%, and the 30-year yield rose to 5.1%.
ETFs See Billions in Inflows
Investor appetite for crypto has translated into booming spot Bitcoin ETF activity. These funds have attracted over $4.2 billion in inflows this month alone, pushing cumulative investments to an impressive $43 billion.
Technicals Support Further Upside
From a technical analysis perspective, Bitcoin’s chart is showing signs of a sustained bullish breakout. A cup and handle pattern has emerged, historically a bullish continuation signal. The pattern depth of around 30% suggests a potential rally toward $141,000, provided current momentum holds.
Moreover, Bitcoin narrowly avoided a death cross a bearish signal where the 50-day and 200-day moving averages cross downward. The last such near-miss in August 2024 preceded a sharp rally, adding weight to bullish projections.
Bitcoin’s explosive rise amid a faltering stock market underscores its growing role as both a hedge against economic instability and a legitimized investment vehicle. With institutional inflows, favorable legislation, and strong technical setups all aligning, the path forward for Bitcoin and major altcoins appears increasingly bullish at least for now.
