Spotlight on Yield-Bearing Stablecoins Sends Ether Up 6% Relative to Bitcoin, Analyst Links Move to GENIUS Act Momentum

Ether Gains on Bitcoin as U.S. Stablecoin Bill Puts Yield Models Under Scrutiny

Ethereum’s ether (ETH) is outpacing bitcoin (BTC) as regulatory developments in Washington drive a shift in market dynamics. Investors are positioning ahead of the GENIUS Act—a U.S. stablecoin bill expected to limit yield-generating models, a move that could boost Ethereum’s relative appeal.

On Tuesday, the ETH/BTC trading pair rose nearly 6% to 0.02670 on Binance, its strongest daily gain since mid-May. Ether also climbed over 4% in dollar terms, briefly crossing the $3,100 mark for the first time since February.

The rally comes as markets anticipate that the GENIUS Act will prohibit U.S. stablecoin issuers from offering interest-bearing products. According to Markus Thielen, founder of 10x Research, the proposal is reinforcing Ethereum’s significance within the crypto ecosystem.

“The bill is likely to ban yield-bearing stablecoins, which in turn highlights Ethereum’s central role in digital asset infrastructure,” Thielen wrote in a note to clients.

One of the key players affected is Ethena, issuer of the $5 billion synthetic stablecoin USDe. Built on Ethereum, USDe generates yield through a delta-neutral arbitrage strategy—shorting perpetual futures to hedge the ETH collateral deposited by users. This strategy has long been viewed as a suppressor of ETH price action due to its consistent sell pressure in the futures market.

“Ethena accounts for around 4% of Ethereum’s $26 billion in open interest,” Thielen said. “Its persistent shorting has contributed to bearish momentum in ETH futures.”

In response to growing regulatory pressure, Ethena has approached the U.S. Securities and Exchange Commission (SEC), arguing that USDe is a payment tool, not a security—and should fall outside the scope of the GENIUS and STABLE Acts. Based in Lisbon, Ethena primarily attracts capital from outside the U.S., creating uncertainty around how U.S. regulations would apply.

“If forced to comply with U.S. rules, Ethena might have to halt ETH purchases altogether,” Thielen warned. “Yet ENA-USDT continues to rally, and ETH funding rates are rising—indicating that markets may be underestimating the regulatory risk.”

Despite the ongoing debate, Ethena is delivering strong results. The protocol has generated nearly $300 million in total revenue over the past 12 months and posted $15 million in fees last month alone, according to TokenTerminal. That puts it just behind leading platforms like Tether, Ethereum, Circle, and Solana.

“Higher funding rates are fueling a surge in arbitrage activity, with hedge funds increasingly deploying capital into these strategies,” Thielen noted. “We expect this to translate into growing inflows for Ethereum ETFs.”

The GENIUS Act, which passed the Senate with bipartisan support in June, is expected to head to a vote in the House later this week.