Bitcoin reached a new record high, fueled by optimism that the US Congress will soon pass a stablecoin bill - the GENIUS Act. This will be the first regulatory framework under the Trump administration, reports Euronews.

During the Asian session on May 22, the world's largest cryptocurrency soared above $111,000, surpassing its previous all-time high of over $109,000 set during President Trump's inauguration on January 20.

The rally was supported not only by legislative changes, but also by growing institutional interest. Crypto guru Michael Saylor's firm, Strategy, unveiled an aggressive new $765 million bitcoin purchase, bringing its total holdings to over $63 billion. Major financial institutions including JPMorgan Chase, Morgan Stanley and BlackRock have also expanded cryptocurrency offerings to clients.

"Perhaps the most important change is who is buying. This is the first real bull market (investor term for continued growth) where institutional participation is at the forefront," said Josh Gilbert, market analyst at eToro Australia. 

Stable coins are cryptocurrencies designed to maintain a stable value by being pegged to reference assets such as the US dollar, the euro or commodities such as gold.

On May 19, a group of Senate Democrats dropped their opposition to the bill, allowing it to pass a key procedural vote and raising hopes that the Senate will pass it this week. The bill is expected to include provisions aimed at protecting holders of stablecoins and regulating potential misuse to fund criminal or terrorist activities.

The bill was previously stalled over concerns about potential conflicts of interest stemming from President Trump and his family's involvement in cryptocurrency. In January, the Trump Republican launched his own Memori coin, and in March, the Trump family's business supported the launch of a new stablecoin- USD1. USD1 is pegged to US dollar deposits and backed by short-term US Treasury securities. 

David Sachs, the White House crypto czar and Trump's senior adviser on artificial intelligence, said in an interview with CNN that passing the bill would increase demand for U.S. government debt.

"If we provide the legal clarity and the legal framework for that, I think we could create trillions of dollars of demand for our Treasuries virtually overnight," he said.

Bitcoin has become one of the best-performing risk assets this year, rising nearly 20 percent since the start of the year. By contrast, the S&P 500 has fallen 0.48%, while the Nasdaq has risen 2.7%. Meanwhile, gold, a traditional safe-haven asset, has risen about 21% over the same period.

Despite its impressive rally, bitcoin remains a highly volatile financial asset with limited fundamental support, unlike equities, which are supported by corporate earnings. | BGNES