Bitcoin has rocketed higher over the last month, helped by fears stoked by Tesla billionaire Elon Musk that the U.S. dollar could be teetering on the verge of collapse.
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The bitcoin price has come within striking distance of its all-time high of $112,000 per bitcoin, suddenly soaring 50% from its April low as the market braces for a Federal Reserve game-changer.
Now, as a $37 trillion “ticking time bomb” could be about to blow up the bitcoin price, U.S. Treasury secretary Scott Bessent has issued a huge crypto market prediction.
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U.S. Treasury secretary Scott Bessent has predicted the stablecoin market could exceed $2 … More
Dollar-pegged stablecoins, currently dominated by Tether’s USDT and Circle’s USDC, could 10x to become a $2 trillion market in just three years, according to U.S. Treasury secretary Scott Bessent, who said he believed it could even “greatly exceed that.”
Stablecoins—cryptocurrencies that are price-pegged to assets such as the U.S. dollar—have exploded in popularity in recent years as a way to move money around the world, however, the market remains unregulated even as stablecoin issuers like Tether and Circle see their valuations and profits surge.
“I believe that stablecoin legislation backed by U.S. treasuries or T-bills will create a market that will expand U.S. dollar usage via these stablecoins all around the world,” said Bessent, speaking during a House ways and means committee hearing. “I think that $2 trillion is a very reasonable number.”
Bessent’s prediction echos a report from analysts with Standard Chartered Bank who earlier this year predicted U.S. stablecoin legislation would boost the market to around $2 trillion, up from just over $200 billion currently.
“U.S. legislation on stablecoins … would further legitimize the stablecoin industry,” Geoff Kendrick, Standard Chartered’s global head of digital assets research, wrote in an emailed note. “This has implications for both U.S. Treasury buying (for reserve purposes) and U.S. dollar hegemony.”
Bessent’s comments come as pressure on the U.S. dollar as the world’s reserve currency is mounting due to the U.S. debt pile that’s on track to top $40 trillion in the next decade.
Last week, Tesla billionaire Elon Musk shared a warning from Coinbase chief executive Brian Armstrong that the spiraling U.S. debt pile could lead to the U.S. dollar losing its reserve currency position to bitcoin.
“In the history of the U.S. dollar as a reserve currency there have been numerous passages along the way where many people assumed that the U.S. dollar would lose reserve currency status and there’s always been a new mechanism that has cemented that,” Bessent said, echoing similar comments made by U.S. president Donald Trump and his administration that the dollar’s position will be strengthened by the adoption of dollar-pegged stablecoins.
This week, the U.S. Senate voted 68 to 30 to move forward the so-called Genius Act that would regulate stablecoins, setting the bill up for a final vote that could happen as soon as Monday.
“The version of the Genius Act that we will invoke cloture on today reflects months of hard work and negotiations from members on both sides of the aisle,” Republican majority leader John Thune said in comments reported by Politico, adding, “it’s time to move forward and pass this legislation.”
The bill’s advancement has been named as a “tailwind” for the bitcoin price and wider crypto market.
“The Senate’s recent approval of the Genius Act mandating 1:1 stablecoin reserves and offering regulatory clarity, stands as a significant tailwind,” Joel Kruger, market strategist at LMAX Group, said in emailed comments.
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The bitcoin price has rocketed higher over the last year, helped by expectations the U.S. will pass … More
Meanwhile, Wall Street banks are gearing up to enter the stablecoin market, expected to give legitimacy to the wider bitcoin and crypto ecosystem.
Bank of America chief executive Brian Moynihan has said the passage of stablecoin regulation will allow the bank to enter the stablecoin market.
“We’re working with the industry, working individually. We have this pretty well understood … but the problem before was it wasn’t clear we were allowed to do it under the banking regulations, and there was a lot of mystery about that,” Moynihan said at a Morgan Stanley conference in New York, it was reported by Yahoo Finance.
“Even the large banks are becoming crypto natives,” Mateusz Kara, Ari10 chief executive, said in emailed comments. “Like water and gravity, there is an inevitability to the rise of crypto.”
