Ether Outperforms Bitcoin as Stablecoin Regulation Takes Center Stage
Ethereum’s native token, ether (ETH), is gaining ground against bitcoin (BTC) as anticipation builds around the U.S. GENIUS Act—legislation that could reshape the stablecoin market by restricting yield-bearing models. According to 10x Research founder Markus Thielen, the shift has turned market attention sharply toward Ethereum and its growing role in the digital asset economy.
The ETH/BTC ratio on Binance climbed nearly 6% on Tuesday to 0.02670, its best daily performance since May 13, breaking out of a multi-week consolidation phase. In dollar terms, ETH rallied over 4% to cross $3,100 for the first time since February.
Thielen attributes the move to rising expectations that the GENIUS Act will prohibit U.S.-based stablecoin issuers from offering interest-like returns—effectively banning yield-bearing stablecoins.
“This would reinforce Ethereum’s structural importance within the crypto ecosystem,” Thielen noted in a client update shared with CoinDesk.
A key part of that ecosystem is Ethena’s USDe, a $5 billion synthetic stablecoin backed by ETH and structured around a delta-neutral strategy. USDe generates yield through a “cash and carry” trade, shorting perpetual ETH futures in equal proportion to collateral deposits.
This strategy has long been seen as applying persistent sell pressure in the futures market, capping ETH price upside and narrowing the basis—the gap between futures and spot prices.
“Ethena accounts for about 4% of Ethereum’s $26 billion in open interest,” Thielen said. “Its continuous futures selling has exerted downward pressure on ETH pricing.”
Amid the regulatory uncertainty, Ethena has proactively engaged with the U.S. Securities and Exchange Commission (SEC), arguing that USDe functions as a payment mechanism rather than a security, and should therefore fall outside the scope of the GENIUS and STABLE Acts.
Headquartered in Lisbon, Ethena primarily serves non-U.S. users. This international footprint raises questions about how—or whether—the platform would be affected by U.S. regulations. According to Thielen, the market appears to be interpreting the risks as minimal.
“If Ethena had to comply, it might be forced to stop buying ETH entirely,” he said. “But the strength in ENA-USDT and rising ETH funding rates suggest traders see limited regulatory impact. Since USDe isn’t offered in the U.S., Ethena may remain untouched.”
Despite these headwinds, Ethena continues to perform strongly. It has generated nearly $300 million in revenue over the past year and earned $15 million in fees last month alone, according to data from TokenTerminal—ranking behind only Tether, Ethereum, Circle, and Solana.
“Rising funding rates are prompting hedge funds to pursue arbitrage opportunities through platforms like Ethena,” Thielen added. “That momentum could translate into greater inflows for Ethereum-based ETFs.”
The GENIUS Act, which passed the Senate in June with bipartisan support, is expected to reach the House floor for a vote by Thursday.
