ETH Surges Past $3,100 While ETH/BTC Ratio Posts Best Gain Since May
Ethereum (ETH) is significantly outperforming Bitcoin (BTC) this week as the U.S. Congress edges closer to passing the GENUIS Act — legislation expected to ban yield-bearing stablecoins. As regulatory uncertainty mounts for tokenized interest products, investors appear to be rotating capital back into Ethereum, whose underlying ecosystem powers many decentralized financial services.
The ETH/BTC trading pair rose nearly 6% to 0.02670, its best single-day performance since May 13, according to data from TradingView. Meanwhile, ETH’s price climbed over 4%, breaking above the $3,100 level for the first time in five months.
GENUIS Act Raises Questions About Yield Stablecoins Like Ethena’s USDe
The proposed GENUIS Act, expected to reach a House floor vote by Thursday, would restrict U.S. stablecoin issuers from offering any form of interest-bearing features. The legislation is aimed at protecting consumers and curbing systemic risk from unregulated digital yield products.
This has thrust the spotlight on Ethena’s synthetic dollar, known as USDe, which has grown to a $5 billion market cap. USDe generates yield using delta-neutral strategies—essentially shorting Ethereum futures to hedge user deposits.https://www.coindesk.com/markets/2025/07/16/ether-races-6-against-bitcoin-as-genuis-act-puts-spotlight-on-yield-bearing-stablecoins-analyst
Markus Thielen, founder of 10x Research, noted that Ethena’s activity has historically applied downward pressure on Ethereum’s price by consistently selling futures contracts.
He added, “If US-based stablecoin issuers are barred from paying yield, Ethereum’s role in the broader DeFi system could become even more prominent — especially as an infrastructure layer rather than a risk vector.”
Institutional Repositioning and Market Sentiment Shifts
The rally in ETH/BTC suggests that traders and institutions are beginning to reprioritize Ethereum as regulatory winds shift. Rising ETH funding rates and strong performance from related tokens like ENA-USDT further support the narrative that Ethereum may benefit from the proposed stablecoin regulations — especially if platforms like Ethena face operational restrictions.
Ethena, headquartered in Lisbon, Portugal, has already engaged with the SEC, arguing that its synthetic dollar functions as a payment instrument and should not fall under the purview of the GENUIS or STABLE Acts. However, U.S.-based regulation may still influence market behavior globally, especially if large volumes of capital are impacted.
Key Takeaways for Traders and Investors
- ETH outperformed BTC by nearly 6% in 24 hours, with ETH/USD exceeding $3,100.
- Anticipation of the GENUIS Act is triggering a reallocation of capital into Ethereum.
- Yield-bearing stablecoins like USDe face increased scrutiny.
- ETH funding rates are rising, signaling bullish sentiment and demand for long positions.
Regulatory Spotlight Could Reinforce Ethereum’s Dominance
As the GENUIS Act approaches a final vote, the market is already adjusting in anticipation. Ethereum’s infrastructure-first role, combined with its non-yield nature, may position it as the primary beneficiary if U.S. lawmakers clamp down on synthetic dollar protocols. While much depends on the final language of the bill, ETH’s recent strength suggests traders are betting on regulatory clarity bringing Ethereum closer to the financial mainstream.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.