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.
