Ravi Tanuku links recent changes in the crypto market not only to stablecoins themselves. He believes that the adoption of the GENIUS Act also affected bitcoin’s position, changing the market’s attitude toward its monetary function.
Why the Market Saw Bitcoin Differently After the GENIUS Act Was Passed
Since July 2025, gold has outperformed bitcoin by almost 100%. Both assets were in the same macroeconomic conditions, but showed completely different dynamics.
Popular explanations such as the end of a market cycle or worsening investor sentiment, according to the author, do not fully explain what is happening. If the problem is really just market cyclicality, why does gold keep rising?
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Ravi believes the reason for bitcoin’s weakness lies elsewhere. In his view, the turning point was the adoption of the GENIUS Act in the US.
The document introduced rules for stablecoins backed 100% by US dollars or government bonds. As a result, the market gained an official, government-approved tool for storing and moving digital dollars.
From Ravi’s perspective, this is what changed the demand balance. Some users who previously saw bitcoin as an alternative to the traditional financial system and a way to store digital value now had a simpler tool in the form of regulated stablecoins. As a result, part of the demand for digital dollars began to shift from bitcoin to this segment of the market.
Comparison of bitcoin and gold dynamics since July 2025. Source: Bloomberg
What Bitcoin Was Actually Used For
Bitcoin is usually discussed as an investment vehicle or as a digital analog of gold. But in a number of countries, it was used for completely different purposes.
Nigeria, Vietnam, Turkey, Argentina, and Ethiopia have long been among the leaders in cryptocurrency usage. In all these countries, people regularly face weakening local currencies and restrictions when working with US dollars.
In such conditions, bitcoin often became not a way to make money, but a way to preserve the purchasing power of money or transfer funds abroad.
Many bought BTC not for price growth. They needed access to an asset that was not subject to local banking restrictions and allowed them to exit the national currency.
According to Ravi Tanuku, this demand remained one of the key pillars for bitcoin for many years and largely coincided with the dynamics of the global money supply M2.
Bitcoin and global M2 money supply. Source: Bloomberg
This is clearly seen in developing countries. If you look at the period after the market peak in November 2021, a resident of Nigeria, Turkey, Ethiopia or Vietnam who simply held dollars was often in a better position than a bitcoin holder.
Both options showed strong results in local currency terms. During this period, bitcoin returned about 275%, while the dollar yielded about 172%.
The difference was in the level of risk. Bitcoin’s annual volatility was 68%, while for the dollar it was about 18%.
Because of this, the risk-adjusted return was much higher for the dollar. The Sharpe ratio for BTC was about 0.5 versus 1.5 for a simple dollar-holding strategy.
In addition, bitcoin’s maximum drawdown during this period reached 66%, while for the dollar it did not exceed 6%.
Comparison of bitcoin and dollar returns in emerging markets. Source: Bloomberg
These people bought bitcoin not for speculation and not because they saw it as digital gold. In many cases, the task was much simpler — to maintain access to the dollar.
For a long time, bitcoin remained one of the few tools that allowed this problem to be solved. However, the key role here was not played by the cryptocurrency itself, but by its peg to the dollar value. The author believes that most of the benefit investors received was from holding a dollar asset, not from bitcoin’s unique features.
With the advent of regulated stablecoins, the situation changed. Now the same effect can be achieved without the high volatility and deep drawdowns that BTC experienced for many years.
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At the same time, the shift of users to stablecoins began even before the adoption of the GENIUS Act. According to Artemis, by early 2025, the volume of B2B payments in stablecoins had grown more than 30 times and exceeded $3 billion per month.
The main driver of this growth was international settlements. According to the author, the GENIUS Act did not start this process from scratch, but only accelerated a trend that was already gaining momentum.
What Happened Next
The capitalization of stablecoins grew from about $211 billion in January 2025 to more than $306 billion by October. The growth was about 45%.
Monthly stablecoin issuance also increased sharply. Before the GENIUS Act it was about $6.6 billion, and in the three months after the law was passed, it rose above $13 billion.
Bitcoin fell by 43% over the same period. At the same time, money did not leave the crypto market entirely. Investors simply needed bitcoin less and less to access the necessary tools.
Dynamics of gold, bitcoin, and the stablecoin market after the GENIUS Act. Source: Bloomberg
Then the market had a chance to test the theory of bitcoin as digital gold in practice.
In the second half of 2025, the global economy began to accelerate. Commodities rose, and gold, silver, and copper hit new local highs by January 2026.
Bitcoin behaved differently during this period. Instead of moving with safe-haven assets, it began to fall along with technology stocks and other risky assets.
By the end of 2025, bitcoin was moving more and more in tandem with the technology sector. Its correlation with the IGV index, which includes major software developers, rose to 0.64. The market had not seen such levels since the crypto winter of 2022.
Against the backdrop of rising gold, silver, and other commodities, this was telling. Instead of acting as a safe haven, BTC was closer to growth stocks.
The Next Test for Bitcoin
Now the market is closely watching the CLARITY Act bill. The document is supposed to define the legal status of bitcoin and establish it as a commodity asset.
For large funds, this issue is of practical importance. As long as the status of BTC remains in dispute, it is harder for many institutional investors to include it in strategies that already feature gold, silver, and other commodity instruments.
If the CLARITY Act is passed, the situation may change. In this case, management companies will have a clearer legal framework for working with bitcoin, and various indexes and funds will have additional grounds to include it in their products.
However, after the adoption of the GENIUS Act the market has already faced significant changes. Regulated stablecoins have begun to cover some of the needs for which bitcoin was previously used, especially in countries where people needed simple access to dollar assets.
At the same time, the CLARITY Act can strengthen another narrative and cement BTC as a digital analog of gold.
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The main question is not whether bitcoin will rise after the law is passed. Almost any asset can show short-term growth on positive news.
What matters more is whether the market’s behavior itself will change. Will bitcoin start moving with gold again, or will it continue to trade as a risky asset alongside tech companies and fast-growing market sectors?
Ravi notes a certain irony. The crypto industry has spent years seeking clear regulatory rules. However, the first major law actually strengthened the position of stablecoins — a tool that, in his opinion, partially took away one of bitcoin’s main functions.
Now the market is waiting to see if the next major law can give bitcoin a new role or will finally confirm that the old demand model is already a thing of the past.
Investors should pay less attention to bitcoin’s price and more to which assets it is trading alongside. This may become the main signal for the market in the coming quarters.
