Crypto markets shrugged off what looked like a major setback Wednesday. Bitcoin climbed nearly 2% to $118,716. Ether did even better, jumping over 4% to $3,201.26.
The bounce came after Tuesday’s stumble. House Republicans had blocked two key crypto bills that the industry really wanted. But investors? They didn’t seem to care much.
Circle shares rose 5%. Coinbase gained about 2%. Both had closed lower the day before when the legislative roadblock hit.
The real action was in ether treasury stocks. BitMine absolutely exploded – up 22% after Peter Thiel bought a stake in the company. The Thiel effect spread fast. SharpLink jumped 13%. Bit Digital gained 11%.
Here’s what happened Tuesday. The House failed to advance two key pieces of legislation the crypto world has been waiting for. The GENIUS Act – that’s the stablecoin bill. And the CLARITY Act – the bigger, messier market structure bill. Industry players like Coinbase had hoped to see both move forward together.
Oppenheimer analyst Owen Lau called the stock reaction overblown. He told CNBC this is about “when,” not “if” these bills pass. “It’s not such bad news which is why the stocks [Coinbase and Circle] recovered in late trading,” he said.
The bills will eventually pass after negotiations, Lau believes. Doesn’t matter if they go through separately or together for long-term value. But bundling them would be better for short-term stock moves. Would eliminate “three or four months of uncertainty.”
Trump weighed in Tuesday night with a social media post. Said several House Republicans changed their minds after a White House meeting. They’ll now vote to move the legislation forward.
The GENIUS Act has an interesting wrinkle. It would restrict stablecoin issuers from paying users interest. That reinforces Ethereum’s importance in the ecosystem. The network supports tons of stablecoin activity and institutional applications.
But here’s the thing about ether’s recent rally. The fundamentals don’t support it. 10x Research’s Markus Thielen points out active addresses are flat. Network revenue hasn’t changed. Gas fees have barely moved up. Yet ether has doubled in three months. Still, it’s down for the year and more than 50% off its record high.
Bitcoin had its own drama this week. More than $360 million in long liquidations hit Monday. The crypto bills getting blocked didn’t help. But it recovered quickly. Monday saw the flagship cryptocurrency reach an all-time high above $120,000.
The institutional money keeps flowing. Bitcoin ETFs pulled in $402.99 million Tuesday, according to SoSoValue. Ether funds grabbed $192.3 million.
Bottom line? A legislative hiccup that looked like bad news turned into a buying opportunity. The crypto crowd seems convinced these regulations are coming eventually. Peter Thiel backing an ether company doesn’t hurt either.