June 2025 in Crypto: Israel-Iran, GENIUS Act, and More

Historically, June tends to be one of the quietest months for crypto price movement. Bitcoin, often used as a proxy for broader digital asset trends due to its long historical record, typically sees little change during this month. On average, June delivers nearly zero price variation, with a roughly 60-40 split between positive and negative months. While seasonal trends in financial markets are often dismissed for lacking rational basis—since arbitrage should theoretically neutralize them—this June aligned with historical precedent. Our Top10 Crypto CTI index ended the month with only a modest 0.5% gain.

Bitcoin Monthly Price Returns

Source: coinglass

What makes this lack of market direction all the more remarkable is that June was anything but uneventful, even if price action didn’t reflect the headlines. In the US, inflation undershot expectations for the fourth consecutive month—ordinarily a bullish signal for risk assets, including crypto. However, the Federal Reserve chose not to follow the European Central Bank’s lead in cutting interest rates, opting instead to keep borrowing costs unchanged. This cautious stance, though widely expected, came amid growing uncertainty around the inflationary impact of Trump’s proposed tariffs and ongoing energy market volatility.

Israel-Iran: Geopolitical Jitters

The major global development was, of course, Israel’s sudden launch of Operation Rising Lion, targeting Iranian nuclear facilities. The attack sent oil prices soaring over 20%, due to fears of supply disruptions in the Strait of Hormuz—a vital oil transit route for 20% of the world’s crude oil.

While gold benefited from the uncertainty, rallying close to its recent all-time high, its digital equivalent did not experience the same safe-haven inflows. Instead, crypto prices fell several percentage points. Notably though, this decline was more muted than the 9% slump that occurred in October 2024 when Iran last launched a missile strike on Israel. Not only that, but in the days following the initial Israeli strike they rebounded quite robustly despite Iran’s aggressive retaliatory response —more forceful than during its previous missile strikes against Israel.

One plausible explanation for the market’s more muted initial reaction this time around is that investors may be becoming desensitized to Middle East tensions after repeated flare-ups over the past 18 months. Moreover, the memory of a sharp October sell-off followed by a 50% rally may have instilled confidence that geopolitical crises don’t necessarily derail long-term bullish trends in digital assets.

That confidence was tested later in the month when President Trump authorized US military action against Iran’s fortified nuclear sites. Despite previous hints at diplomatic resolution or delay, Trump unexpectedly and abruptly approved a strike by six B-2 bombers armed with bunker-busting munitions on several Iranian nuclear facilities. Crypto markets slumped in response—but, again, the downturn was short-lived because just two days later, Trump unexpectedly announced a ceasefire, albeit one that held about as long as it takes an ice cream to melt in the Sahara: a development that clearly annoyed Trump, prompting him to use some very unpresidential language – see image.

Source: Daily Telegraph

The crypto market, often criticized for its volatility, seemed relatively stable compared to this diplomatic rollercoaster.

A Stroke of GENIUS (Act)

Amid all the turmoil, one major crypto-specific event stood out: the US Senate passed the GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act on June 17, with a decisive 68-30 vote as some Democrats broke ranks from their more crypto-sceptic party colleagues. The bill outlines the first comprehensive regulatory framework for stablecoins in the United States.

Key provisions include:

• Reserve Requirements: Stablecoins must be fully backed one-to-one by “safe”¹ assets—US dollars, bank deposits, short-term Treasuries, or money market funds.
• Federal Oversight: Issuers with more than $10 billion in circulation require a federal charter; those with over $50 billion are subject to annual audits.
• Rehypothecation Restrictions: Reusing collateral is mostly banned, with limited exceptions.
• Issuers: Both insured banks and approved non-banks (via OCC approval) can issue stablecoins.

Importantly, stablecoins are legally defined as digital payment methods—not legal tender or FDIC-insured deposits. Nonetheless, the Act was widely welcomed across the crypto industry, viewed as a positive sign of the administration’s supportive stance toward digital assets, which stands in marked contrast to the prior Biden administration.

Trump has stated his desire to sign a stablecoin bill before August. While the House still needs to reconcile the GENIUS Act with its own STABLE Act, any finalized legislation would likely position the US as a global leader in digital currency regulation and ensure the dollar’s ongoing dominance—especially since foreign-issued stablecoins would no longer be lawful for US use.

Winners…

One of the biggest winners from the Senate’s GENIUS Act vote was Circle, the recently IPOed stablecoin issuer. As the largest regulatory-compliant stablecoin issuer (Tether remains the largest stablecoin issuer globally but does not currently meet GENIUS Act standards) Circle is well positioned to benefit once the legislation is finalized, which explains why the company’s share price surged more than 500% above its IPO level following the Senate vote.

Of course, it is not just crypto native companies that are trying to get a piece of the action. With immaculate timing, two days prior to the Senate passing the GENIUS Act, JP Morgan submitted a regulatory filing to trademark JPMD with the US Patent office. The application refers to “Providing trading, exchange, transfer, and payment services for digital assets, namely, virtual currency, digital currency, digital tokens, payment tokens, decentralized application tokens, and blockchain enabled currency”, which is quite a mouthful! There is no explicit mention of JPMD being a stablecoin, but the timing strongly suggests that JP Morgan are laying the foundations for their own version of one.

While this is clearly a long way from the original cypherpunk ideals that motivated Satoshi to invent Bitcoin 16 years ago, JP Morgan’s actions implicitly acknowledges a simple truth: crypto rails are more efficient than traditional financial infrastructure.

…And Losers

JP Morgan’s crypto pivot is interesting because according to a 2024 McKinsey report the global banking industry generated annual revenue of over $7tr, resulting in $1.1tr in net income – a sizeable amount by any standard. One would think such a business model – commercial banks literally have a “license to print money” – would make them incredibly attractive to investors. However, as the aforementioned report confirms, such perceptions are incorrect.

Global banks trade on a price-to-book value of 0.9, meaning their market cap is lower than the value of their net assets. This makes them one of the lowest valued industries in the world, with an average valuation discount of almost 70% relative to all other industries – see images below. This suggests skepticism about the sector’s future growth.

Source: McKinsey

Part of the explanation for this valuation gap can be attributed to the drive by financial regulators in the post-GFC world to make banks safer by requiring them to hold higher capital reserves. This implied reduction in leverage, combined with the low interest rate environment for much of the past decade and a half, negatively impacted their net margins, making them relatively less attractive from an investment perspective.

However, as BoE governor Bailey highlighted in a speech earlier this year, such arguments cannot fully explain the valuation discount. For one thing, by making banks safer, there is a lower probability of equity holders being wiped out ie. blow-up risk, which would typically be expected to boost their attractiveness to investors. Something else, as Bailey implies, must be at play.

One hint as to what it might be can be seen by looking again at the top chart. The companies at the other end of the valuation spectrum – the investor darlings so to speak – are tech companies. Via their large digital platforms these companies have been pushing into the financial services area, competition that has served to undermine the barriers-to-entry that has historically protected tradfi companies.

The AI-Crypto Convergence

Many of these tech companies are also at the vanguard of AI, which as I argued in the previous monthly update is set to radically reshape the world economy because of its ability to substantially boost productivity. Indeed, not much foresight is required to see that the threat to tradfi firms from tech companies will only become greater as this new technology gets rolled out because payments, intermediation and custody services can all be provided by small IT teams deploying and overseeing AI-generated computer code.

Of course, unlocking these gains will require more than sacking tens of thousands of tradfi banking employees, the underlying financial infrastructure will also need to be revamped, with legacy systems that have evolved in an unstructured piece meal approach over several decades replaced by a better, more streamlined, alternative. This is exactly what crypto brings to the party.

Consider Tether: with just 150 employees, it generated $14 billion in profits in 2024. That’s $93 million per employee, making it the world’s most profitable company on a per capita basis. The combination of crypto rails and AI could widen this efficiency gap even further.

Companies like JP Morgan, who are shifting their focus to embrace a tech-heavy future will thrive, those that don’t, won’t. It’s really that simple. Investors intuitively seem to understand this given that JP Morgan stock trades at a price-to-book value of 2.26 – substantially higher than the industry average.

Caveats on Stablecoin Adoption

Despite their promise, stablecoins are not without risks.

First, they could very easily be a gateway financial product toward central bank digital currencies (CBDCs), which—when combined with digital IDs—could be misused for authoritarian control over personal finances. Indeed, programmable public money constitutes a dictators wet dream because it gives those in power complete and total control over how the population can transfer and spend their own money, as acknowledged by BIS General Manager Agustín Carstens a few years back.

Second, stablecoins don’t generate interest for holders, unlike bank deposits. While the underlying reserves may earn interest, issuers typically retain these profits. This non-interest-bearing design is partly intentional: it discourages competition with banks and positions stablecoins primarily as payment tools, not savings vehicles. This aspect does, however, make them worse than fiat money when it comes to maintaining their store of value over the long-run. As a result, even in a stablecoin-dominated future, cryptocurrencies with hard supply caps (like Bitcoin) or those offering native yield through staking, which makes them better stores of value, will remain in high demand.

Crypto, after all, isn’t a one-size-fits-all solution.

1 Irony fully intended.