Table of contents

• Key points:
• introduction
• Bitcoin has achieved a market value of over US$1 trillion, and its market activity continues to expand
• Accelerating demand: a dual driving force from ETFs and corporate vaults
• On-chain positions: divided by address balance
• The GENIUS Act opens up a new era of stablecoins
• Summarize

Key points:

• Bitcoin’s achieved market value exceeds $1 trillion, reflecting the deepening of capital commitments and confidence of long-term holders, and the total market value of the entire crypto market is approaching $4 trillion.
• Demand for Bitcoin (BTC) and Ethereum (ETH) has exceeded the issuance of SGD, driven mainly by the ongoing inflow of spot ETF funds and the continuous increase in corporate vaults.
• The market-leading pattern began to spread, Ethereum showed relatively strong strength, and altcoins such as SOL and XRP also attracted more funds to participate due to the increase in spot trading volume.
• The GENIUS Act establishes the first federal regulatory framework for fiat currency stablecoins in the United States, bringing compliance clarity and bringing greater participation and competitive environment to the stablecoin market worth more than $250 billion.

introduction

The crypto asset market approached the $4 trillion mark for the first time, an important milestone in the industry's development history. This round of rise comes from the superposition of a variety of structural and cyclical forces: from the continuous inflow of funds from spot Bitcoin and Ethereum ETFs, to the accelerated increase in holdings of crypto asset vault companies, and then to key regulatory breakthroughs such as the GENIUS Act. It can be said that the "happy" factors driving the crypto market are increasing.

This article will dismantle the key market forces and on-chain capital flows that drive this round of expansion.

Bitcoin has achieved a market value of over US$1 trillion, and its market activity continues to expand

Bitcoin (BTC) hit a new high at $123,000, with a total market cap climbing to $2.38 trillion, and its realized market cap (i.e., the total value of each Bitcoin at the price at the last on-chain transfer) also exceeded $1 trillion for the first time. This data shows that even at high levels, a large amount of capital continues to enter the market, highlighting the increased market confidence in Bitcoin’s long-term role as a global asset, especially in the context of the continued growth of ETF funds and institutional interest.

Market activities also show early signs of "leading the rise and spreading". Ethereum (ETH) has begun to show relatively strongness, with ETH/BTC rising 73% since May, with ETH breaking $3,900. This momentum is supported by multiple factors such as record inflows of ETF funds, accelerated adoption of corporate vaults, and the positive effects of the Ethereum ecosystem (especially stablecoins) after the passage of the GENIUS Act.

This "diffusion" trend is also reflected in spot trading data: not only BTC trading volume remains strong, but ETH and large altcoins such as SOL and XRP have also increased significantly in the past few weeks. Meanwhile, Bitcoin’s market dominance has dropped to 59%, while the total altcoin market capitalization is approaching $1.6 trillion. Although there are initial signs of "leading the rise and spreading", it remains to be seen whether this trend will continue.

The following table summarizes the market statistics for tokens with market caps, excluding stablecoins and other on-chain derivatives:

Accelerating demand: a dual driving force from ETFs and corporate vaults

One of the important forces driving demand growth of Bitcoin (BTC) and Ethereum (ETH) are spot trading funds (ETFs). After a brief slowdown in March and April, inflows of Bitcoin ETFs accelerated again in May, bringing the total holdings of U.S. spot Bitcoin ETFs to exceed 1.27 million BTC (about 6.4% of the total supply). Among them, iShares Bitcoin Trust (IBIT), a subsidiary of BlackRock, is still the largest holder, currently holding approximately 735,000 BTC (worth approximately US$87 billion).

Ethereum (ETH) is also experiencing a similar surge in demand. Over the past few weeks, spot Ethereum ETFs have seen continuous net inflows, even surpassing Bitcoin inflows in some periods. The total holdings of ETH ETFs have reached 5.8 million ETH, accounting for about 4.8% of the total ETH supply, with most of the growth concentrated in recent months – although these ETFs were launched more than a year ago.

The demand for ETH is also supported by more and more corporate vaults focusing on Ethereum, making ETH accumulate faster than new issuances. Unlike corporate vaults that passively hold BTC, ETH vaults earn native income through staking and DeFi, this model is currently extended to other large token ecosystems such as Solana (SOL), Tron (TRX) and Ethena (ENA).

On-chain positions: divided by address balance

As shown in the above chart, supply held by small holders (

The GENIUS Act opens up a new era of stablecoins

The GENIUS Act was officially signed into law on July 18, establishing the first federal regulatory framework for anchoring fiat currency stablecoins in the United States. The bill creates a level playing field for stablecoin issuers, requiring:

• Full reserve support
• Reserve assets must be low-risk, short-term U.S. Treasury bonds or cash
• Conduct regular audits
• The issuer must obtain a license

This is similar to the impact of the approval of the spot Bitcoin ETF, bringing regulatory clarity and legitimacy to the US dollar-denominated stablecoin market.

Recently, the growth of stablecoin supply has accelerated significantly, and it can be seen from the 30-day rolling supply changes. The total supply has now exceeded US$255 billion.

This regulatory framework is expected to enhance public trust in fiat stablecoins, lower the threshold for new entrants, and bring more full competition to the payment market. From existing issuers such as Tether and Circle to potential new players such as regulated banks and fintech companies, the competition is expected to drive transaction costs down, enhancing the payment experience for consumers and businesses, while also further strengthening global demand for the US dollar.

Among existing stablecoin issuers, Circle and Paxos appear to be most qualified to meet the requirements of the GENIUS Act, as USDC and PayPal USD (PYUSD) have long adopted full reserve support and regularly provided audit reports. Circle is actively applying for a federal trust banking license from the U.S. Office of the Comptroller of the Currency (OCC) to achieve full compliance with the GENIUS Act and to provide custody services to institutional clients. Other major issuers are also undergoing structural adjustments to meet the requirements of the new law.

For example, Anchorage Digital, a crypto bank that has obtained a federal license, has partnered with Ethena Labs to launch USDtb through its stablecoin issuance platform. Thanks to Anchorage's federal regulation and reserve management, this makes Ethena's USDtb one of the first stablecoins to fully comply with the GENIUS Act. This issuance model provides a one-stop compliance solution for projects that want to continue operating in the U.S. market.

In contrast, Tether (USDT), which accounts for about 68% of the stablecoin market, faces a more complex adjustment path. USDT has long operated outside the U.S. regulatory system, and its reserve assets include assets that do not meet GENIUS standards, such as Bitcoin and precious metals. In response, Tether plans to launch a compliant stablecoin for institutional payments and interbank settlements, which will comply with all requirements of the GENIUS Act. The existing USDT of $162 billion will continue to operate overseas, mainly serving emerging markets.

Stablecoin issuers have three years to complete compliance requirements of the GENIUS Act. After this, only stablecoins that meet GENIUS standards can be supported by exchanges and custodians, which provides an adequate period of adjustment for all parties.

Summarize

The recent crypto market's total market value sprint of $4 trillion reflects the growing market confidence in the entire asset class. Demand from ETFs and corporate vaults continues to exceed the new supply, further improving the supply and demand structure of BTC and ETH. Valuation indicators such as Bitcoin’s market value to realized value ratio (MVRV) show that the market has not overheated yet.

Although the market is still dominated by strong ETF inflows and long-term holders, market leadership is showing a gradual spread.

In addition, the passage of the GENIUS Act marks a key turning point in US crypto regulation: it not only brings a clear regulatory framework for stablecoins, but also paves the way for the deep integration of the competitive landscape and traditional finance. Although there may still be fluctuations in the short term, the combination of solid structural demand, clear regulatory prospects and expanded participants' scope indicates that the market will continue to strengthen in the future.

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