- U.S. laws reshape crypto with stablecoin and market oversight clarity.
- Institutions boost Bitcoin and Ethereum as ETFs drive long-term holding.
- DeFi, stablecoins, and altcoins expand with record activity and adoption.
The third quarter of 2025 marked a turning point: cryptocurrency became more deeply embedded in the global financial system. The shift was fueled by the first U.S. federal laws governing digital assets, which provided long-sought clarity on stablecoins and market oversight.
The GENIUS Act, signed into law in July, introduced the first clear regulations for stablecoins. Under the new rules, issuers must hold reserves in cash or short-term Treasury securities, publish monthly disclosures, and undergo annual audits when issuing at scale.
Oversight now falls under the banking system, with insured depositories and the Office of the Comptroller of the Currency supervising compliance. As a result, stablecoin supply expanded quickly, which added liquidity to decentralized finance and supported upward momentum in crypto markets.
Related: DeFi Tops Crypto Sectors With 44.6% YTD Gains as RWAs and Stablecoins Follow Close
At the same time, the House passed the CLARITY Act, which is now awaiting Senate approval. The bill aims to resolve jurisdictional disputes by assigning Bitcoin and Ethereum to the CFTC, while the SEC maintains control over securities-like offerings.
Meanwhile, the Anti-CBDC Act blocked the Federal Reserve from using a retail central bank digital currency, signaling that privately issued stablecoins will remain central to the digital dollar model.
Institutions Drive Bitcoin and Ethereum Growth
Market performance during the quarter displayed the effects of these legal changes. The S&P 500, gold, and Bitcoin all set fresh highs, while silver and platinum also gained. As a result, crypto’s movement became more directly tied to the U.S. economy, moving away from its earlier role as a hedge against equities.
Bitcoin traded between $108,000 and $118,000, with support coming from spot ETF inflows. These products pushed long-term accumulation rather than short-term speculation, which helped maintain stability. At the same time, retail investors began to step back as corporations, funds, and other institutions took a larger share of holdings.
Ethereum also advanced strongly. The asset broke above its previous all-time high, supported by demand from stablecoins and DeFi expansion. Additionally, balances on exchanges declined, indicating that investors were moving ETH into long-term storage. As a result, the ETH/BTC ratio climbed above its 365-day average, raising the possibility of further gains relative to Bitcoin.
DeFi Expansion and Stablecoin Growth
Beyond the two largest assets, activity surged across major networks. Solana, BNB Chain, and Avalanche each reported record volumes and growing revenues. In parallel, Aave strengthened its lead in DeFi, with a total value locked of $74B and more than $3T in lifetime deposits. Pendle and Fluid also reached new highs, as product launches and integrations continued to drive adoption.
The stablecoin sector expanded quickly as well, with a total capitalization nearing $ 300 billion. USDT and USDC retained dominance, while Ethena’s USDe rose soon as a new competitor. At the same time, Plasma launched as a high-performance blockchain for stablecoin payments, adding further infrastructure and liquidity to the market.
Related: Q3 2025 Crypto Outlook: ETF Inflows and Treasury Demand Point to Record Quarter
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