BitMEX co-founder Arthur Hayes believes the US laws searching for to determine a framework for dollar-pegged stablecoins will likely be bullish for Bitcoin (BTC) and main banks.
In a brand new essay, Hayes says the Guiding and Establishing Nationwide Innovation for U.S. Stablecoins (GENIUS) Act will unlock trillions of {dollars} in liquidity and increase markets.
In line with Hayes, the GENIUS Act, which was passed within the U.S. Senate final month and is now ready to be tabled on the ground of the U.S. Home of Representatives, will enable too-big-to-fail (TBTF) banks to difficulty stablecoins and unlock as much as $6.8 trillion in liquidity.
TBTF banks, which embrace megabanks similar to JPMorgan Chase, Financial institution of America, Citigroup, and Wells Fargo, are massive monetary establishments so essential to the economic system that their failure could be catastrophic for the worldwide monetary system.
In mild of the GENIUS Act, Hayes says the perfect guess isn’t investing in non-bank stablecoin issuers similar to Circle.
“The true stablecoin play isn’t betting on crusty FinTechs like Circle—it’s understanding that the US authorities simply handed TBTF banks the launch keys to a multi-trillion-dollar liquidity bazooka disguised as ‘innovation’…
As an alternative, go lengthy Bitcoin. Go lengthy JPMorgan. Neglect about Circle.”
In line with the BitMEX co-founder, the elevated liquidity arising from permitting banks to difficulty stablecoins, in addition to different fiscal coverage measures, might ship “Bitcoin pumping 10x to $1 million.”
The shares of the megabanks, alternatively, might soar by practically 3x on account of the GENIUS Act, per Hayes.
“If we take the typical price-to-earnings ratio of the TBTF banks at 14.41x and multiply that by the fee financial savings and stablecoin NIM (internet curiosity margin) potential, it comes out to $3.91 trillion. The present market cap of the eight TBTF banks is roughly $2.1 trillion, which implies that stablecoins might pump TBTF financial institution shares on common by 184%.”
Comply with us on X, Facebook and Telegram
Do not Miss a Beat – Subscribe to get e mail alerts delivered on to your inbox
Test Price Action
Surf The Daily Hodl Mix
 
Disclaimer: Opinions expressed at The Every day Hodl will not be funding recommendation. Traders ought to do their due diligence earlier than making any high-risk investments in Bitcoin, cryptocurrency or digital belongings. Please be suggested that your transfers and trades are at your personal danger, and any losses you might incur are your accountability. The Every day Hodl doesn’t advocate the shopping for or promoting of any cryptocurrencies or digital belongings, neither is The Every day Hodl an funding advisor. Please notice that The Every day Hodl participates in affiliate internet marketing.
Generated Picture: Midjourney
