A rally in crypto-related stocks occurred on Monday, driven by Circle and Coinbase, as the advancement of US digital asset legislation and bitcoin's surge above $80,000 boosted sector sentiment. Circle, the issuer of the USDC stablecoin, saw an 18% increase, while Coinbase rose by approximately 7%. BitGo, a firm offering digital asset infrastructure, stablecoin services, and custody solutions, climbed around 10%.
Other notable gainers included Strategy, the largest corporate bitcoin holder, Robinhood, a crypto-friendly digital broker, and Bitmine, an Ethereum treasury firm, all of which saw increases of 3-4%, highlighting the broad-based market upswing. The move was fueled by bitcoin's push above $80,000, its strongest level since late January, providing a positive backdrop for the crypto sector. BTC gained nearly 2% over the past 24 hours, outpacing the broader CoinDesk 20 Index's 1.2% increase. Investor optimism was further boosted by signs of progress on the Digital Asset Market Clarity Act, a crucial piece of US legislation regulating crypto markets, which appears to be moving closer to passage.
A newly released compromise would prohibit stablecoin issuers from offering yield on idle balances while allowing rewards tied to usage and transaction activity. According to Markus Thielen, founder of 10x Research, this clarification addresses a key obstacle, bringing the bill closer to passage. With the stablecoin yield issue addressed, lawmakers are expected to move toward a formal markup, potentially as soon as this week.
The odds of passage on the prediction platform Polymarket have risen to 64%, reflecting growing confidence in the bill's advancement. As a result, 'equity markets are beginning to price in potential winners,' Thielen stated. Circle, as a regulated stablecoin issuer, is widely seen as a potential beneficiary of clearer rules, particularly if stablecoins are formally positioned as payment tools rather than yield-bearing assets.
The firm's upcoming earnings, due next week, add another layer of momentum for the stock, Thielen noted.