- Analyst Jacob King is warning that the new US GENIUS Act for stablecoins could effectively ban Tether (USDT)
- He alleges that Tether provides 85-90% of Bitcoin’s trading volume and its removal would crash the market
- The warning comes as the U.S. House prepares for a final vote on the landmark stablecoin legislation this week
Crypto analyst Jacob King has warned about a potential market collapse if the U.S. Senate passes the GENIUS Act, a bill he claims could lead to the banning of Tether (USDT) in the United States.
King believes the stablecoin’s removal from the U.S. market would shake the entire crypto ecosystem, particularly Bitcoin.
King’s Thesis: The Tether-Bitcoin Connection
According to King on X, Tether provides an estimated 85–90% of the daily trading volume for Bitcoin. He alleges that the company has been printing large amounts of USDT without proper backing in an attempt to support cryptocurrency prices.
Tether’s transparency and reserves have been long debated within the crypto industry. The company has repeatedly defended its reserves and claimed full backing of issued tokens. However, critics continue to call for more regulatory oversight.
GENIUS Act Raises Alarm
King claims the proposed GENIUS Act, if passed, would effectively ban Tether in the United States. The GENIUS Act, backed by President Donald Trump, proposes strict reserve, liquidity, and compliance requirements for stablecoins.
Pro-XRP attorney Jeremy Hogan had once echoed King’s sentiment. He noted that these measures, especially related to sanctions compliance and anti-money laundering, could make it difficult for Tether to operate legally in the U.S.
Hogan also pointed out that the bill favors fully compliant issuers like Circle’s USDC and Ripple’s RLUSD.
King also highlighted recent institutional behavior, pointing to data suggesting the largest ETF outflows in crypto history occurred this week. He interprets this as a sign that large investors are exiting quietly.
However, Bitcoin recorded a net inflow of $779.6 million yesterday, marking one of the strongest since July 10, when Bitcoin ETFs saw a net inflow of $1.18 billion.
He further alleges that Tether insiders are offloading Bitcoin through over-the-counter (OTC) trades, avoiding direct market impact but signaling internal concerns over potential regulatory shifts.
Trump Backs Bill Amid Political Roadblocks
Earlier this week, the U.S. House voted 196–223 against advancing the GENIUS Act, largely due to opposition from Democrats and a split GOP vote. However, Trump quickly intervened, urging Republicans to unite behind the legislation.
Following an Oval Office meeting involving Trump, Speaker Mike Johnson, and key GOP lawmakers, the bill overcame a procedural hurdle in a record-setting 10-hour vote, paving the way for a final vote. The updated bill, which passed with a 217-212 vote, also includes language opposing central bank digital currencies (CBDCs), a concern cited by some Republican holdouts.
Related: Trump Pushes GENIUS Act Back on Track as French Hill Confirms House Votes
The GENIUS Act, along with the CLARITY Act and the Anti-CBDC bill, is now set for floor votes in the coming days. If passed, the GENIUS Act could reshape the future of crypto infrastructure and determine which issuers can continue to operate under U.S. law.
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