September to Mark Bitcoin’s Cyclical Low, Bull Run Nears Final Stages: Bitfinex Alpha

CoinDesk Bitcoin Price Index is up $1473.67 today or 1.33% to $112266.22

• Highest 4 p.m. level since Aug. 24, 2025, when it traded at $112578.39
• Up five consecutive days, up 3.74% over this period
• Longest winning streak since Aug. 13, 2025, when it rose for five straight trading days
• Best five day stretch since the five days ending Aug. 13, 2025, when it rose 5.42%
• Up 20.18% year-to-date
• Down 9.82% from its all-time intraday high of $124495.51 on Aug. 14, 2025
• Up 93.35% from 52 weeks ago (Sept. 4, 2024), when it traded at $58064.31
• Down 9.82% from its 52-week intraday high of $124495.51 on Aug. 14, 2025
• Up 110.19% from its 52-week intraday low of $52604.85 on Sept. 7, 2024
• Traded as high as $112584.01
• Up 1.62% at today's intraday high

Note: CoinDesk Bitcoin Price Index (XBX) at 4 p.m. ET close

Data compiled by Dow Jones Market Data

European Central Bank President Christine Lagarde warned that the EU must close gaps in stablecoin regulation to avoid destabilizing runs on reserves, Reuters reported. She told lawmakers that both EU and foreign issuers should face equal requirements.

Stablecoin Risks Under EU Rules

The EU’s Markets in Crypto-Assets Regulation (MiCAR) requires stablecoins to be fully backed. Lagarde said the framework leaves room for risk if non-EU firms operate under looser rules. She urged lawmakers to demand equivalence regimes from foreign jurisdictions.

“European legislation should ensure that such schemes cannot operate in the EU unless supported by robust equivalence regimes in other jurisdictions and safeguards relating to the transfer of assets between the EU and non-EU entities,” she said.

Lagarde warned that holders may choose to redeem in the EU, where MiCAR bans fees and imposes stricter safeguards. That could concentrate pressure on reserves based in the bloc.

“In the event of a run, investors would naturally prefer to redeem in the jurisdiction with the strongest safeguards, which is likely to be the EU,” she said. “But the reserves held in the EU may not be sufficient to meet such concentrated demand.”

International Cooperation Needed

Lagarde added that without global standards, risks will shift to weakly regulated markets. “Without a level global playing field, risks will always seek the path of least resistance,” she said.

Federico Cornelli, a commissioner at Italy’s market watchdog CONSOB, said EU rules must also reinforce that cryptocurrencies are not legal tender. “Only the euro issued by our ECB is legal tender, and this must be made very clear to all citizens,” he said.

Related: ECB President Dismisses Bitcoin as EU Reserve amid CNB's $7B Proposal

The ECB, as chief banking supervisor and lender of last resort in the eurozone, has placed stablecoin oversight at the center of its stability mandate.

Early this year, Lagarde said Bitcoin (BTC) is unlikely to be adopted as a reserve asset by EU banks. Her remarks came after the Czech National Bank (CNB) put forward a proposal to allocate 5% of public funds to Bitcoin as part of a diversification plan.

The CNB was scheduled to review the proposal on January 30, with the potential allocation amounting to more than $7.3 billion, based on its $146 billion in total reserves.

At the January 30 conference, Lagarde reiterated that Bitcoin does not meet the ECB’s criteria for reserve assets, which emphasize liquidity, security, and stability.

TL;DR

Green Days Incoming?

Ethereum (ETH) was at the forefront of gains in August, hitting a new all-time high of almost $5,000 towards the end of the month. Since then, though, the price headed south and is now hovering below $4,400 (per CoinGecko’s data).

Certain factors signal that the bulls might enjoy a new resurgence soon. The popular X user Ali Martinez revealed that 500,000 ETH (worth more than $2.1 billion) have been withdrawn from crypto exchanges in the past week alone.

Data compiled by CryptoQuant shows that currently, the total stash stored on such platforms is around 17.3 million tokens, which represents the lowest level witnessed since the summer of 2016. This is a clear sign that investors have been shifting from centralized exchanges toward self-custody methods, which in turn reduces the immediate selling pressure.

Meanwhile, ETH whales continue to show a huge appetite for the asset. Earlier this week, those large investors (holding between 10,000 and 100,000 coins each)accumulated260,000 tokens in just a single day. As a result, they increased their total holdings to 29.62 million ETH, which accounts for nearly a quarter of the asset’s circulating supply.

Such efforts leave fewer coins available on the open market and could push the price up (assuming demand doesn’t diminish). The whales are dominant market participants, and their activities are often followed by retail investors who might decide to mimic their move and distribute additional capital into the ecosystem.The Analysts’ Take

Many crypto enthusiasts on X seem optimistic about ETH, believing it has enough fuel left to post additional gains. The analyst with the moniker Mister Crypto thinks the price has reached its local bottom in April when plunging below $1,400 and is now headed for an “up only” trajectory.

On the other hand, Ted made a somewhat bearish forecast. He noted that ETH continues to hold the $4,200 level but claimed that the price “doesn’t look very strong” and envisioned a potential drop to $3,800 as “a final support target for the correction.”

The GENIUS Act is expected to drive global stablecoin use to new heights. With an already established market dominance position, Ethereum stands to benefit disproportionately from this transition.

In a conversation with BeInCrypto, Sanjay Shah, a researcher at venture capital firm Electric Capital, stressed that the Ethereum blockchain has unique architectural advantages that will reinforce the network’s role as the foundational layer for the incoming stablecoin economy.

Ethereum’s Market Dominance

When US President Donald Trump signed the GENIUS Act into law last month, it triggered a significant price rally across the cryptocurrency market.

However, Ethereum’s performance was unmatched. It experienced the most positive and sustained effect, surpassing any competitor in the immediate aftermath.

In the days before the bill’s passage, Ethereum’s price surged, climbing more than 20% and surpassing the $3,500 mark. The momentum continued even after the bill was signed, with the network’s value peaking at $3,875 the following week.

At the time of writing, its price rests at $4,465.

This powerful market reaction reinforced investors’ confidence in Ethereum’s ability to capitalize on a new regulatory environment.

The GENIUS Act has effectively removed major hurdles, paving the way for wider stablecoin adoption and easier global access to the US dollar, and investors are betting on Ethereum to lead the way.

Will the GENIUS Act Make Ethereum a Financial Anchor?

Stablecoins are set to become a central component of the global financial system, serving as a mainstream dollar rail for various transactions, from savings and payroll to cross-border payments.

The regulatory clarity provided by the GENIUS Act is the key to unlocking this widespread adoption, enabling regulated institutions to issue and utilize stablecoins confidently.

According to Shah, this transition will establish a new, open financial infrastructure, with Ethereum acting as an anchor.

Since Ethereum already hosts most stablecoin liquidity, it will capture the lion’s share of this increased activity.

Why Ethereum Is Positioned to Lead

Ethereum’s existing stronghold is built on three key properties crucial for global, institutional adoption: global accessibility, safety for institutions, and resistance to government interference.

The legislation’s focus on compliance and security reinforces these qualities, drawing more participants into the network’s orbit. As is, Ethereum already commands the market.

According to recent data from DefiLlama, Ethereum is responsible for over 52% of the $278 billion stablecoin market capitalization.

He further reinforced this point by saying that the growth will naturally drift toward the established leader:

However, the incoming wave of stablecoin demand will inevitably place greater pressure on networks to process transactions effectively. This reality presents a significant challenge for Ethereum given its history of scalability issues.

According to Shah, it can easily rise to the occasion.

L2s: Addressing the Scalability Issue

Ethereum’s scalability issues have been a well-known concern in the crypto industry. Its mainnet has traditionally been limited to processing a small number of transactions per second, often leading to network congestion and elevated transaction fees during periods of high demand.

As the GENIUS Act goes into effect, the anticipated boom in stablecoin use will place unprecedented pressure on the network’s capacity.

According to public statements from Vitalik Buterin and the Ethereum Foundation, the network’s long-term answer to end a track record of scalability challenges lies in Layer 2 solutions (L2s).

These L2s process the bulk of consumer and institutional stablecoin transactions in a highly efficient, low-cost manner. This approach ensures that the network can handle mass adoption without compromising on its core principles of decentralization and security.

The Ethereum mainnet (L1) will serve a different but equally critical role as the secure settlement layer, handling the finality of transactions processed on the L2s.

According to Shah, this synergy is what makes the scaling solution viable.

He also noted the flexibility and benefits this system offers to institutions:

Despite the rise of competing blockchains, Ethereum’s dominance can remain firm in light of this enhanced infrastructure.

What Needs to Happen to Unseat Ethereum?

While rival blockchains like Solana and Tron have made inroads in the stablecoin market, their challenge to Ethereum’s dominance is unlikely to succeed in the long term.

A network’s long-term success in finance depends on its foundational qualities. Decentralization and security create a virtuous cycle that attracts capital and talent. Ethereum’s proven security record and decentralized nature foster an environment of institutional trust, which draws in large pools of capital, creating deep liquidity.

This rich ecosystem attracts developers to build applications and financial services on the platform. Shah argues that these core factors make Ethereum’s position difficult to challenge.

This reality presents a compelling case for why regulated institutions may feel more inclined to choose Ethereum, even though they can now launch their own private stablecoins.

The Path of Least Friction

Though traditional financial institutions can explore launching their own private blockchains, they might gravitate toward open, public networks.

Though the GENIUS Act opens up new opportunities for institutions, launching and operating a private stablecoin requires a substantial operational commitment.

Based on current trends, all signs suggest that Ethereum will strengthen its position as the primary settlement layer for digital dollar transactions. The asset’s rising price and growing institutional interest in the network reinforce such a trajectory.

The Verkhovna Rada, Ukraine’s parliament, passed the first reading of a bill to legalize and tax cryptocurrency on Wednesday, according to lawmaker Yaroslav Zhelezniak. If signed into law, the bill would significantly shape the digital asset economy in the country, which ranks among the world's top in crypto adoption.

According to Zhelezniak’s announcement on a Telegram channel, the bill passed the first reading with 246 lawmakers voting in support. The legislation's draft outlines an income tax of 18% and a military tax of 5% on digital asset profits. The bill also sets a preferential 5% tax rate on fiat conversions its first year, according to the announcement.

The proposed taxation rate of 23% is in line with the April recommendation of Ukraine’s financial regulator. The initial recommendation exempted crypto-to-crypto and stablecoins transactions, bringing Ukraine’s crypto tax system closer to crypto-friendly countries.

Bitcoin’s strong performance this year has been largely driven by surging demand through ETFs and Digital Asset Treasuries (DATs), but this price momentum masks a more concerning trend.

In fact, data suggest that network activity has not kept pace with demand for the asset. This divergence creates an opaque outlook for Bitcoin’s long-term health, particularly as transaction fees, the critical incentive to reward miners for securing the network, remain low.“Digital Gold” Narrative Could Backfire

Similar to how a company’s revenue drives value to its share price, fees are expected to drive value for Bitcoin’s price. With the fourth halving in April 2024, cutting block rewards, fees today account for less than 1% of miner revenues.

CoinMetrics said that this has left miners increasingly reliant on BTC price appreciation. If fees do not rise to compensate for declining issuance, many miners could be forced offline after prolonged drawdowns. This, in turn, would end up jeopardizing the network’s decentralization and censorship-resistance.

The centralization of hashpower already looms large, with Foundry commanding 30% of total hashpower and Antpool 18%. While mining pools continue to invest heavily in hardware to maintain dominance, individual minersstrugglewith profitability, often liquidating their BTC holdings to cover operational costs.

The long-term challenge becomes clearer when considering the 2028 halving, which will reduce block rewards to just 1.5625 BTC. Without higher fee revenue, the risk of miner attrition will rise, and potentially concentrate security into fewer operators.

This structural challenge is compounded by weak demand for blockspace.

Because there isn’t much demand for Bitcoin’s blockspace, transaction fees stay low. This makes it easier and cheaper for everyday users to send money on the network. However, the demand for Bitcoin as an asset, especially from large institutional investors, doesn’t translate into more transactions happening on the blockchain itself. Instead, these investors mainly treat Bitcoin as “digital gold” or a long-term store of value.

Institutional investors buying ETFs and DATs contribute to price but not to on-chain activity, leaving miners without the fee-based incentives needed for long-term security. To address this imbalance, developers are experimenting with native BTC applications that could restore fee revenue to miners instead of offshoring activity to other chains.

Projects like Babylon Genesis Chain, which allows BTC holders to stake with operators securing external proof-of-stake networks, point to how Bitcoin could expand its role beyond passive value storage. Babylon’s launch in August 2024 temporarily drove fees above $150 per block and sparked demand for blockspace. However, these spikes have proven short-lived, and fee revenue remains low.Base Layer Starves

The tokenization trend, too, reveals the risks of activity migrating elsewhere: while Coinbase’s cbBTC has grown rapidly to over 52,000 BTC in supply, largely at theexpenseof BitGo’s wBTC, much of this demand occurs outside the Bitcoin base layer. This also generates little fee income for miners.

For Bitcoin to sustain its “lofty” valuation, CoinMetrics believes that the ecosystem must find ways to stimulate more consistent network activity and create new demand for blockspace and reward miners for their role in securing the chain.