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Asset manager Bitwise says the Senate stablecoin bill could have a bigger impact on the crypto market than the launch of spot Bitcoin ETFs (exchange-traded funds), and might spark a multi-year crypto bull run.
“Outside of the January 2024 approval of spot bitcoin ETFs, this is the most important regulatory development in the history of crypto,” said Bitwise’s chief investment officer Matt Hougan in a May 20 blog post. ”It may even be bigger.”
Hougan said the legislation should be passed in the summer, setting the stage for a ”long-term, sustained rally in crypto assets beyond bitcoin.” The biggest beneficiaries will likely be Ethereum (ETH), Solana (SOL), and various decentralized finance (DeFi) assets like Uniswap (UNI) and Aave (AAVE), he added.
Hougan’s remarks come after the US senate advanced a key stablecoin bill, which many analysts see as an important step toward legitimizing digital assets in the US. If signed into law, the bill will be the first legislation to cover crypto regulation.
Stablecoin Market Cap Could Soar To $2.5 Trillion “In No Time” If Stablecoin Bill Approved
The stablecoin bill could finally provide issuers such as Circle, Tether and others, which have operated in a “regulatory gray zone” up until now, a framework to follow.
According to Hougan, that will put “federal weight behind stablecoins.” It will also allow “big banks to issue stablecoins and merchants to accept them.”
Progress. https://t.co/YLYzF6Osqr
— Matt Hougan (@Matt_Hougan) May 20, 2025
Hougan said it’s “pretty amazing” that the stablecoin market cap has risen to $200 billion without any participation by the largest financial institutions, but added that their combined valuation will surge to $2.5 trillion “in no time” if regulation is passed.
Assets Beyond Bitcoin Poised For Sustained Rally, Bitwise Says
If the crypto market does undergo an extended bull run, Hougan predicts that digital assets beyond Bitcoin stand to benefit. He predicts that it’s only a matter of time before institutions move trillions of dollars worth of assets onto the blockchain, which he believes will benefit ETH, SOL, UNI and AAVE, given their established roles in the market.
“Once we normalize moving dollars over blockchain networks—and the largest financial institutions in the world are participating in that effort—it’s a relatively small step to moving stocks, bonds, and other financial assets over the same rails,” Hougan said.
“This is the fundamental thesis for investing in non-bitcoin crypto assets like Ethereum, Solana, and the like,” he said. ”I see the approval of stablecoin regulations normalizing crypto as a financial tool, paving the way for the largest institutions in the world to issue stablecoins and use them for payments.”
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