New rules, new moves: Wall Street joins stablecoin frenzy

The stablecoin market has grown by $4 billion in just one week. This jump comes after the US passed a new law called the GENIUS Act.

Signed on 18 July, the law gives clear rules for companies that issue stablecoins. With new clarity, big banks and financial firms are rushing to join the market.

Before the GENIUS Act, traditional finance firms stayed away from stablecoins. They were unsure about how these digital dollar tokens would be regulated. Now, they’re acting fast. Anchorage Digital launched a new stablecoin platform on Tuesday. 

On the same day, asset manager WisdomTree released its new token, called USDW. Both are built to meet the rules set by the new law.

The GENIUS Act says stablecoin issuers must hold full reserves. That means they need to have enough real dollars to match all tokens in circulation. 

They also have to go through regular audits and get the right licences. These rules are designed to make the system safer and more trustworthy.

Banks like JPMorgan, Citigroup, and Bank of America have all confirmed they’re preparing to launch their own dollar-backed stablecoins. 

Until now, these major banks were watching from the sidelines. With rules now in place, they feel confident to move forward.

The law mostly helps fiat-backed stablecoins. These are tokens backed by real US dollars or other national currencies. Fiat-backed tokens already make up 85% of the stablecoin market. The biggest names are $USDT from Tether and $USDC from Circle.

But not every kind of stablecoin is benefiting. Algorithmic stablecoins – those that use software instead of reserves – are left out of the new legal framework. This means they will likely fall behind as fiat-backed coins get more attention and investment.

The GENIUS Act has changed the game. It sets a level playing field where big finance companies can now compete directly with crypto-native firms. 

With trust and rules in place, more investors may turn to stablecoins as a safer choice in the digital asset world.

NFTs bounce back, thanks to CryptoPunks and celebrity sales

After months of decline, the non-fungible token (NFT) market is picking up again. According to DappRadar, the total market value for NFTs reached $6.6 billion in July. That’s a 94% rise from the previous month. 

Weekly trading volume also went up by 51%, hitting $136 million. These are the strongest numbers the market has seen since February.

The growth comes after a long slump. Trading volumes had fallen for four straight quarters, from mid-2024 to mid-2025. Now, things seem to be turning around – especially for top collections like CryptoPunks.

CryptoPunks is an NFT collection based on Ethereum. It has seen floor prices jump by 53% this month. The floor price is the lowest price you can pay to buy one of the NFTs in the collection. On Monday alone, the floor rose from 40.9 ETH to 47.5 ETH – almost $180,000 in just 24 hours.

During that same day, 83 CryptoPunks were bought by new owners. “They’re still the gold standard of Web3 clout. For some, owning a Punk is about more than profit – it’s status, pure and simple. And right now, that status is trending”, DappRadar analyst, Sara Gherghelas, wrote. 

The biggest CryptoPunks sale this week came on Thursday. GameSquare Holdings said it bought Punk #5577, known as the Cowboy Ape, for $5.15 million in company stock. 

The NFT’s former owner was Robert Leshner, the founder of the DeFi platform Compound. He will now become a shareholder in GameSquare.

The Cowboy Ape Punk is rare. It’s one of only 24 ape-themed CryptoPunks, and it wears a cowboy hat. It was first claimed in 2017 for $454 and was later sold for $7.7 million in February 2022, according to the CryptoPunks website.

Other collections are also gaining steam. Pudgy Penguins, a series of penguin-themed NFTs, briefly passed CryptoPunks in weekly trading volume last week. 

Pudgy Penguins reached over $20 million in sales, although CryptoPunks has since taken back the top spot.

Another collection, CryptoBatz, also saw a sharp increase. On Wednesday, trading volume surged 400% after the death of rock star Ozzy Osbourne, who created the collection. NFT buyers jumped in to collect the bat-themed tokens after hearing the news.

Overall, the NFT market seems to be waking up. After months of slow activity, top collections and celebrity-driven stories are drawing in more buyers again.

Crypto prices fall despite record US money supply

While stablecoins and NFTs are rising, the wider crypto market is heading the other way. The total crypto market has lost $117 billion in value since Wednesday, dropping from $4.05 trillion to a lower level. This is happening even though the US money supply is rising fast.

The M2 money supply – a measure that includes cash and bank deposits – rose 4.5% year-over-year in June. It reached a record $22.02 trillion, according to a tweet by The Kobeissi Letter. 

Normally, more money in circulation means higher prices for assets. But crypto prices are falling instead.

Derek Lim, head of research at trading firm, Caladan, says the liquidity is not being used. “US liquidity is currently pooled, not deployed”, he said. 

Most of the money is sitting in short-term Treasuries or money market funds. It’s not flowing into crypto or other risk assets yet.

Experts say the market is tired after a long rally. Many investors are taking profits, and some are facing forced liquidations. The CEO of Republic Technologies, Daniel Liu, said: “We’re seeing elevated options activity and increasing liquidation risk”. 

He explained that small price changes are now triggering large waves of selling or short squeezes.

Lim pointed to high leverage as the main issue. Some traders borrowed too much to buy altcoins. This has led to large forced sales. He gave an example: XRP saw $89 million in long liquidations in just one day.

Bitcoin has dropped by 3% since Thursday. Other major coins fell too. Ethereum is down 4.8%, Solana by 6.2%, and XRP by 7.1%, according to CoinGecko.

Ethereum faces a major obstacle. Liu says there is $260 million in “ask-side supply,” or sell orders, that needs to be cleared before Ethereum can rise above $4,000 again. 

Solana is in a more fragile position. Liu says leverage on Solana is too high compared to actual demand, making it riskier.

Still, Lim believes this is a normal correction. “It looks more like a healthy correction, with no evidence of a cycle-ending breakdown yet. We’ve just come off a massive price rally, and the market needs time to consolidate”,  he said. Liu agreed. 

Bitcoin fell to $115,600 in the past 24 hours, a 2.27% drop. That caused over $155.28 million in liquidations. Most of the damage was to long positions, which lost $139.78 million. 

Short positions lost only $15.50 million. Analysts say this shows that many traders were overly confident the price would keep rising.

The fall began after Bitcoin failed to break through $119,000. When momentum faded, automated systems triggered a wave of selling. Bitcoin dropped nearly $3,000 in just a few hours.

Even as prices dropped, trading volume spiked. In the past 24 hours, Bitcoin trading volume rose 26% to $84.97 billion. The total market cap of Bitcoin now stands at $2.3 trillion, with a fully diluted value of $2.42 trillion.

Some analysts say the drop was caused by crowded long trades and algorithmic selling. There was no clear news to explain the fall. Many believe prices could stabilise once the liquidations stop.