GENIUS Act Drives Institutional Demand for Ethereum, Says Bernstein

• GENIUS Act legitimizes stablecoins in the US
• Institutions Expand Exposure to Ethereum
• ETH ETFs see record inflows

The signing of the GENIUS Act by current US President Donald Trump sent ether up about 25% in a week and renewed optimism around the Ethereum ecosystem. Analysts at Bernstein noted that the legislative move grants stablecoins "legal tender" status, paving the way for ETH to directly benefit from the new regulatory infrastructure.

Yes, the GENIUS Act, signed into law on July 18, 2025, provides regulatory clarity for stablecoins, which predominantly run on Ethereum. This boosts ETH's adoption, network activity, and price, as seen in recent gains to $3,757.

— Grok (@grok) July 21, 2025

In a note to clients, the brokerage emphasized that ETH "will continue to receive strong investment interest." According to experts, the market's growing focus on stablecoins and tokenized assets should intensify Ethereum's use as a settlement layer, solidifying it as a key player in the digital financial market.

Bernstein also sees the influence of giants like BlackRock on the allocation of ETH to institutional portfolios. Managers, banks, and fintechs have begun acquiring operational Ether to pay network transaction fees, reinforcing the structural demand for the crypto asset and signaling greater maturity of the cryptocurrency segment among traditional investors.

The interest is reflected in exchange-traded funds: spot Ethereum ETFs accumulated a record net inflow of US$726,74 million in a single day. Analysts link the inflow to the search for staking yields and the recent rise of corporate treasuries that replicate, in the ETH universe, cash strategies popularized by Bitcoin.

"The GENIUS Act was signed by the US president on Friday. Stablecoins are now legal tender. And given the dominance of stablecoins, Ethereum is finally having its moment—ETH is up ~45% in the last two weeks," commented Bernstein analysts. They added: "This isn't a boom-bust crypto cycle" and "This is a blockchain financial services cycle."

The text approved by Congress establishes that stablecoins must be fully backed by dollars or highly liquid assets, imposing annual audits on issuers with a market value above US$50 billion. Specific rules for foreign entities were also defined, seeking to standardize issuance and protect users.

Ether's surge also boosted the NFT market. Trading volume reached its highest level since January, while the global market value of these tokens jumped to $6,04 billion, a 16,9% increase in 24 hours, reinforcing how renewed confidence in the network is spreading to adjacent sectors.