Crypto-linked stocks advance after Trump signs stablecoin law

By Shashwat Chauhan

July 21 (Reuters) - Shares of crypto-linked companies jumped on Monday, as ether prices scaled their highest this year after President Donald Trump signed into law a bill regulating stablecoins in the U.S.

Trump signed the GENIUS Act late on Friday, marking a huge win for crypto industry that has been lobbying for a regulatory framework to gain greater legitimacy. The bill was passed in the House of Representatives by a vote of 308 to 122 on Thursday, after Senate approval.

Bitcoin BTC=, the world's biggest cryptocurrency, inched 0.4% up, though it remains more than 3% away from its all-time high of $123,153 hit last week.

The bill bans yields or interest payments on regulated stablecoins, which Deutsche Bank said is leading to a rise in ether ETH= prices, on expectations that investors are moving into the world's second biggest cryptocurrency as an alternative for yield generation in decentralized finance.

"It has been a long-awaited moment for Ethereum, and although it's too early to be fully convinced of a longer term trend shift, the confluence of factors are playing into its favor," said Luke Nolan, senior research associate at CoinShares.

Ether was last trading at $3,795.4 after hitting its highest level for the year on Sunday.

Both crypto exchange Coinbase Global COIN.O and stablecoin issuer Circle Internet CRCL.N were about 0.1% higher in early trading.

Stablecoins are designed to maintain a constant value, usually a 1:1 U.S. dollar peg, and their use has exploded, mainly by crypto traders moving funds between tokens.

Some large Wall Street banks such as Bank of America BAC.N have also been working on launching their own stablecoins.

FOLLOWING STRATEGY

U.S.-listed shares of companies, which have been adding cryptocurrencies to their coffers lately, were on the rise on Monday.

Shares of BitMine BMNR.A, where tech billionaire Peter Thiel is the top investor and whose chairman is Fundstrat's Tom Lee, advanced 2.7%. Other ether holding firms Bit Digital BTBT.O, BTCS BTCS.O and SharpLink Gaming SBET.O climbed between 2.3% and 8%, respectively.

Companies such as GameStop GME.N have been rushing to add crypto to their balance sheets, following the footsteps of Strategy MSTR.O. Shares of the largest corporate holder of bitcoin have skyrocketed nearly 3,000% since 2020 and climbed 1.7% on Monday.

Blank-check firm Dynamix Corporation DYNX.O surged 26.2% as the Ether Reserve, a new crypto venture backed by prominent crypto investors, was set to merge with the company to form The Ether Machine.

Other cryptocurrencies also advanced, with Solana SOL=CCCL hitting its highest level since February. The ProShares Ultra Solana ETF SLON.P also jumped 17.2%.

XRP XRP= also gained 1%, trading close to its record highs.

The broader crypto sector's market value hit $4 trillion on Friday, according to CoinGecko data.