Crypto-focused stocks jumped on July 18, after ether reached US$3,675.81, its highest since January 6.

The rally followed the US House’s passage of a stablecoin bill. The bill sets a framework for stablecoins pegged to the US dollar, increasing demand for ether, which is used to pay Ethereum network transaction fees.

Shares of crypto firms responded positively.

BitMine rose 12.7%, Bit Digital gained 6.5%, and BTCS jumped 22.9%. Circle Internet climbed 6%, while Coinbase Global rose 7.6%, hitting its highest level since its 2021 IPO.

Ether’s rise aligns with more companies adding it to their balance sheets. But this move faces criticism due to share dilution from equity sales funding the purchases.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Corporate treasury diversification signals crypto’s institutional evolution

The rush to add ether to corporate treasuries represents a significant evolution in how companies manage reserve assets, extending beyond bitcoin’s pioneering approach.

MicroStrategy, the original crypto treasury company, has seen its shares skyrocket more than 3,000% since 2000 as bitcoin’s value increased, creating a template other companies are now adapting for different cryptocurrencies.

This treasury diversification is occurring despite fundamental differences between assets; unlike bitcoin’s fixed 21 million coin supply cap, ether has no maximum supply limit, raising questions about its long-term store of value characteristics.

As noted by Michael O’Rourke from JonesTrading, this emerging “digital treasury company” business model involves “perpetual dilution through share issuance,” creating a complex value proposition where companies continuously sell equity to acquire digital assets.

2️⃣ Stablecoin regulation creates tangible economic impact on Ethereum’s ecosystem

The House stablecoin bill demonstrates how regulatory clarity directly translates to market valuation in crypto markets through specific economic mechanisms.

Most stablecoins operate on Ethereum’s blockchain, requiring ether for transaction fees, creating a direct economic relationship where increased stablecoin adoption drives demand for the network’s native token.

Matthew Dibb from Astronaut Capital specifically identified this connection, noting that “Ethereum is by far the biggest beneficiary of stablecoin usage.”