After the U.S. passed a landmark cryptocurrency bill, investors expect hundreds of billions of dollars to flood in, and the total market capitalization of cryptocurrencies surpassed $4 trillion for the first time on Friday.
This week, the price of Bitcoin briefly reached a historic high of over $123,000, with other tokens like Ethereum and Solana also seeing significant gains. According to digital asset data provider CoinGecko, as of Friday, the total market capitalization of cryptocurrencies has exceeded $4 trillion.
The cryptocurrency industry's market value has surpassed $4 trillion, marking a significant rebound since the major crash in the crypto market in 2022. At that time, the collapse of the FTX exchange had pulled the market capitalization down to about $800 billion. When the price of Bitcoin dropped to about $16,000, many investors exited the market, believing that the risks of crypto assets were too high.
Insiders point out that the latest trends in the crypto market coincide with a series of legislative measures introduced in the U.S., which is one of the most significant steps toward mainstream adoption of cryptocurrency. Institutional funds that have been on the sidelines are now waiting for clarity on such policies, and they will begin to enter the market.
On Thursday local time, the U.S. House of Representatives overwhelmingly voted in favor of three major cryptocurrency bills. Among them, the bill related to stablecoin regulation (the GENIUS Act) received 308 votes in favor and was supported by more than 100 Democratic lawmakers who 'flipped' their votes, compared to 122 votes against. The House also passed independent legislation regarding the market structure of digital assets and prohibiting the issuance of central bank digital currencies (CBDCs). Relevant bills still require a vote in the Senate.
Currently, the cryptocurrency industry has received strong support from U.S. President Trump. Trump has vowed to make the U.S. the 'global capital of cryptocurrency.' He has initiated or supported multiple token projects and appointed officials who support cryptocurrency. David Sacks, the AI and cryptocurrency director appointed by Trump, commented on platform X: 'This is a significant victory for cryptocurrency in the House of Representatives.'
The market expects that stablecoin legislation will clear the way for banks, asset management firms, and other companies on Wall Street to invest in digital assets or create their own tokens. Executives from banks like Bank of America, Citigroup, and JPMorgan have indicated that once the GENIUS Act becomes law, they will create their own stablecoins.
Trump is also preparing to sign an executive order allowing the U.S. $90 trillion pension market to invest in crypto assets and other alternative investments.
However, critics warn that closer integration of cryptocurrencies with the traditional financial system may pose serious risks when the market crashes again. Democratic Senator Elizabeth Warren stated that the GENIUS Act lacks necessary fundamental safeguards to ensure that stablecoins will not trigger a collapse of the entire financial system. She also pointed out the risk of concentrating too much economic power in the hands of a few individuals with privately issued stablecoins.
