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Bitcoin and altcoins continued their upward momentum on Thursday, even as the U.S. stock market experienced further declines. The cryptocurrency market capitalization surged to $3.5 trillion, while Bitcoin reached a record high of $111,860. Meanwhile, the Dow Jones Industrial Average opened lower by around 100 points, extending Wednesday’s 816-point drop.

The Impact of the GENIUS Act on Cryptocurrency

The rally in Bitcoin and altcoins comes on the heels of the U.S. Senate passing the GENIUS Act, a groundbreaking cryptocurrency regulation aimed at stablecoins. This legislation introduces several key measures to enhance the stability and transparency of the crypto market:

  • 100% Reserve Backing: Stablecoin issuers are required to maintain full reserve backing with high-quality assets such as U.S. Treasuries and the U.S. dollar.
  • Monthly Disclosures: Issuers must disclose detailed reserve compositions on a monthly basis.
  • Federal and State Oversight: Issuers with assets exceeding $10 billion will be regulated at the federal level, while smaller issuers will fall under state jurisdiction.

The passage of the GENIUS Act is a pivotal moment for the crypto industry, providing much-needed legal clarity and protection. This move comes in the aftermath of significant industry failures, including the Terra collapse in 2022 and the FTX debacle. By ensuring greater accountability, the legislation aims to safeguard investors and promote long-term confidence in the sector.

Bitcoin’s Safe-Haven Appeal Amid U.S. Credit Downgrade

Bitcoin’s recent rise is also attributed to its growing reputation as a safe-haven asset, particularly after Moody’s downgraded the U.S. credit rating. Concerns over rising U.S. debt, mounting interest payments, and political uncertainty have driven investors to seek alternatives like Bitcoin.

Spot Bitcoin ETFs have seen significant inflows, with over $4.2 billion added this month alone, pushing the cumulative total to $43 billion. This surge underscores Bitcoin’s appeal as a hedge against economic instability.

“Rising U.S. debt and deficits have made traditional assets less attractive, prompting investors to turn to cryptocurrencies like Bitcoin.”

In addition to the credit downgrade, the House of Representatives recently passed legislation that could add an estimated $3.8 trillion to the national debt. This bill extends the 2017 tax cuts, introduces new deductions for tips and overtime pay, and expands the child tax credit, among other measures. Such fiscal policies have heightened concerns about the long-term sustainability of U.S. finances.

Market Trends: Declining U.S. Dollar and Rising Bond Yields

The uncertainty surrounding U.S. financial policies has negatively impacted traditional markets. The U.S. Dollar Index has dropped to 99.6, reflecting weakened confidence in the currency. Simultaneously, bond yields have surged, with the 30-year yield at 5.1% and the 10-year yield climbing to 4.6%. These trends further support the narrative of Bitcoin as a reliable alternative investment.

Bitcoin’s Technical Indicators Signal Strength

From a technical perspective, Bitcoin’s price action also indicates potential for further gains. On the daily chart, Bitcoin has formed a cup and handle pattern, a bullish structure that suggests continued upward momentum. Additionally, Bitcoin narrowly avoided a “death cross,” a bearish signal that occurs when the 50-day and 200-day moving averages cross while trending downward.

The cup pattern has a depth of approximately 30%, and measuring that distance from the breakout level hints at a potential target around $141,000. This technical setup has bolstered confidence among traders, contributing to increased buying activity.

As the cryptocurrency market evolves, developments such as regulatory clarity, safe-haven demand, and strong technical indicators continue to drive investor interest. Bitcoin and altcoins remain at the forefront of the financial revolution, offering both challenges and opportunities for participants.

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