I firmly believe that the current crypto cycle is being actively driven by U.S. government policy.

Just last week, Trump signed an executive order regarding 401(k) retirement accounts, allowing part of those funds to be invested in private equity, real estate, and even digital assets. Going back a bit further, the GENIUS Act was officially passed a few weeks ago, establishing clear regulation for stablecoins. This month, the SEC also shifted its stance, making a high-profile announcement about its commitment to "Crypto Everything." From stablecoins to DeFi, from on-chain identities to tokenized assets, nearly every sector is being drawn into the U.S. regulatory framework.

This isn’t just minor tinkering—it's a fundamental redirection of capital markets. The U.S. is taking deliberate action: integrating crypto into the dollar-based system, making it the next engine of financial growth.

So today, let’s explore what exactly the U.S. government is trying to achieve—and which crypto sectors enthusiasts should pay the most attention to in order to maximize their returns.

What is the U.S. government really building?

This round of policy isn’t about "opening up trading" or "allowing speculation." It marks a system-level overhaul: systematically integrating crypto assets into American-led financial structures using regulatory and financial frameworks the U.S. controls. While this may seem abstract, the pattern is clear when you look at recent developments.

The passage of the GENIUS Act is pivotal—it’s the first federal law in U.S. history for payment stablecoins. The government has defined the "compliant U.S. dollar stablecoin" model and opened the doors of the financial system to it. Stablecoins are no longer a gray-area blockchain workaround—they are now recognized as financial tools within the monetary policy framework. Backed by U.S. treasuries, used by users for cross-border payments, leveraged by banks for liquidity management, and even adopted by companies for accounting, stablecoins now truly have regulatory authorization.

At the same time, the SEC has quietly shifted its stance. It launched “Project Crypto,” not to eliminate the industry but to regulate it under existing laws. The SEC now recognizes that not all tokens are securities and is preparing to introduce unified regulatory standards. They're also moving to require registration for on-chain trading platforms, stablecoins, DeFi, and RWA issuers. The "Crypto Everything" initiative revolves around three goals: 1. Unified regulatory approaches; 2. Attracting compliant capital; 3. Assigning controlled, defined roles for on-chain projects. This means that soon, we may see legally licensed DeFi protocols, RWA issuance platforms conducting compliant fundraising, and exchange-wallet products that interface directly with TradFi.

In essence, what the U.S. government wants is not explosive token prices—it’s to turn blockchain systems into productivity tools under its control. This means the dollar circulates on-chain, securities are issued on-chain, and U.S.-style finance reshapes the next phase of global order. That’s why I keep saying: This crypto cycle isn’t about self-evolution—it’s a digital asset absorption plan orchestrated directly by the U.S. federal government.

Policy on the ground, market reacts quickly

From the GENIUS Act’s passage to the 401(k) executive order, in just a few weeks BTC surged to $123,000 and ETH gained 54% over the month, peaking close to $4,000.

On the macro level, July saw U.S. crypto spot ETFs attract a record $12.8 billion in new capital. Nearly half went to bitcoin-linked products (about $6 billion), while ETH ETFs pulled in $5.4 billion in just a month. BlackRock’s IBIT bitcoin trust soared to $86 billion in assets under management, surpassing some S&P 500 ETFs.

Meanwhile, traditional financial institutions have aggressively moved on-chain. BlackRock’s on-chain U.S. Treasury fund BUIDL now manages $2.9 billion, and major exchanges like Crypto.com and Deribit accept it as collateral, confirming its growing role as on-chain liquidity. JPMorgan has upgraded its Onyx payments blockchain into Kinexys, a new on-chain settlement system, and with clearing giant Marex, completed its first "24/7 real-time on-chain settlement." Put simply: formerly days-long processes in traditional finance—especially on weekends—are now seamlessly moved on-chain.

Institutions aren’t just kicking the tires—they’re all-in on using blockchain. You can follow what KOLs say, but it’s more important to see where the money is flowing. This rally isn’t narrative-driven; after policy clarity, capital proactively found new corridors. Investors are betting on sectors that can “catch the policy tailwind.”

Which sectors benefit first from the policy boost?

Now, which sectors are set to capitalize most directly on these policy benefits? Let’s analyze the details.

This opportunity isn’t spread evenly—it will mostly gather in a handful of areas. My personal call: stablecoins, on-chain financial infrastructure, and compliance-driven ZK tech will see the biggest gains, while other areas will move at varied speeds.

Direct policy winners: stablecoins

Stablecoins are the clearest winners of this U.S. regulatory wave. The GENIUS Act is essentially a passport for the U.S. dollar stablecoin: legal issuance, official validation, and unimpeded access to the U.S. financial mainstream. That’s why we saw Trump’s sons get in ahead of the curve by launching USD1 via WLFI, staking an early lead as the era of compliance began.

On the day the policy took effect, JPMorgan announced its pilot issue of JPMD deposit tokens (fundamentally, fractional-reserve bank deposit stablecoins) on Coinbase’s Base chain. Coinbase’s own USDC, riding the compliance wave, grew its circulation by $800 million in just one week, and launched a crypto credit card backed by American Express, integrating USDC payments into e-commerce checkouts with Shopify and Stripe.

This scale-up is just the start. The real change is the expansion of use cases.

Visa, Mastercard, and similar settlement networks have incorporated stablecoins for high-frequency payments, bypassing the slow, expensive traditional card networks. For cross-border transfers, e-commerce, and in-game transactions, once compliant stablecoins are used, efficiency improves dramatically. The entry of “official” financial institutions also raises the compliance bar: the law requires issuers to be regulated financial institution subsidiaries or licensed trust firms and to pass safety audits by financial regulators.

That effectively blocks small innovators, leading to an oligopoly—Circle, Coinbase, and traditional banks as the three camps vying for dominance. With regulations banning interest payments to stablecoin holders, stablecoins revert to being payment tools and value stores—no more fantasies of double-digit annual returns from algorithmic coins.

How can ordinary users benefit from this new opportunity?

Accessible pathways exist. Several compliant platforms now offer reasonable yields on USDC, with strong safety and liquidity—a better choice for risk-averse capital. Coinbase, for example, offers around 4.1% APY for holding USDC, while Binance has rolled out flexible USDC savings, including a promotional rate up to 12% APR for balances up to 100,000 USDC, with instant fund access.

From an investment standpoint, those yields are competitive—offering stability, safety, and liquidity, and far more useful than leaving funds idle on exchanges. For cross-border users, holding stablecoins means earning yields while hedging against forex risk and avoiding traditional banking hassles.

My conclusion: these policies are clearing a path for compliant, stable US dollar stablecoins. In the short term, expect capital inflows and wider payments adoption; in the long run, they’ll be the ballast of on-chain finance and core bridge for digitized fiat.

Stablecoins as gateway: accelerating on-chain foundational finance infrastructure

U.S. regulatory clarity is paving the way for a domesticated digital financial economy. “Domestication” here means compliant blockchains and protocols will handle more U.S. institutional business, and traditional finance will be eager to integrate with on-chain platforms as the new foundational layer—the second sector I’m most bullish on.

Base provides a clear example: supported by Coinbase’s compliance advantage and seamless exchange integration, it’s quickly becoming the go-to network for U.S. institutions and enterprises to move business on-chain, covering payments, applications, and asset flows. I’m optimistic about the Base ecosystem’s growth, with new applications added through partnerships—such as with Stripe for on-chain payments—making Base the hub for payment innovation. It’s also the backbone for PayPal, JPMorgan, and others.

Looking ahead, payment companies, banks, and brokers in the U.S. will much prefer local, responsive networks—ones where issues can be quickly resolved—over offshore anonymous chains. This “domestication” becomes a compliance moat.

Base has no token; its traffic, value, and vision are realized through B3, its only value channel. B3 is built on Base by a team of Coinbase veterans. B3 inherits all the Base compliance and onboarding advantages, meaning it holds unmatched first-mover leverage for stablecoin payments, institutional settlement, or a North American compliance story. As B3 closes the loop with tailored scenarios, it will attract quality assets seeking to go on-chain or operate long-term at scale. When Base’s usage explodes, B3 becomes the first choice for deploying and scaling real applications—a super-app layer and on-chain economic gateway.

I know the B3 team well—they operate steadily, continually refining products and expanding partnerships. I’ll hold back some details for now, but after major collaborations are made public, B3’s industry role will be further cemented.

I don’t believe B3 will be alone for long. As regulations improve, more traditional giants will follow JPMorgan and Coinbase, issuing on-chain bonds, insurance companies managing policies on-chain, and tech giants issuing internal-use stablecoins. Every big client is a stable cash flow for on-chain infrastructure.

This also raises the bar: infrastructure must handle huge transaction volumes, protect enterprise privacy, and embed audit/risk controls by design. In short, U.S. policy is pushing blockchain infrastructure from “international wild growth” to “domesticated, refined operation.” Domestic, compliant chains and modular networks will be the greatest beneficiaries of this upgrade.

ZK: A new compliance-driven privacy infrastructure

Which sectors previously declared “dead” may now revive? ZK is a strong candidate.

On August 13, OKB’s surge set off a storm on Twitter and across communities, rising from 46 to nearly 120—a nearly threefold jump. The spike was driven by OKX’s one-time destruction of 65.25 million OKB from past buybacks and reserves, removing overhang, along with structural changes as X Layer made OKB the exclusive gas token, channeling demand from wallets, exchanges, and payments.

Contracting supply and concentrated demand made the market realize OKB’s scarcity and utility, leading to a short-term price jolt. Another variable: compliance anticipation. The market has long watched for “OKX to list in the U.S.,” fueling speculation about its future entry, though execution depends on U.S. regulation.

My stance: don’t FOMO—keep watching. ZK may find its stride in this compliance era, or the rally could be brief. In any case, it deserves attention.

The latest U.S. digital asset report states individuals should be permitted private transactions on public blockchains and encourages use of self-custody and privacy-enhancing tech to reduce on-chain data leaks. The White House 2025 digital asset report also mentions ZK as the key path to balancing privacy and compliance. This shift is significant: previously, privacy coins and mixers were on regulators’ "blacklist," but now policymakers see that bringing traditional capital on-chain requires fixing privacy—and ZK is the solution.

On the enterprise side, Google Wallet now offers ZK-based age verification (via Succinct Labs): users can prove they’re over 18 without revealing ID details. It sounds like Web2—KYC-compliant but privacy-preserving—and it’s happening on-chain.

This has brought Succinct into the spotlight, and its token $PROVE has recently outperformed many other projects. The lesson: when top tech companies apply ZK to real business scenarios, market confidence returns.

I see ZK’s return not as a mere emotional rebound but as a compliance-era necessity. Once assets and transactions are fully on-chain, businesses won’t tolerate exposure of their details to competitors, and individuals won’t accept their financial data being fully public.

Meanwhile, regulators are clear: audits must be enforceable and traceability preserved. This seemingly contradictory demand is ZK’s home turf: "prove compliance, then hide the details." For example, large interbank settlements can use ZK to verify AML compliance without disclosing customer identities. Such scenarios will multiply: identity verification, credit scoring—ZK will likely reshape them. Many top ZK teams haven’t issued tokens yet, but regulatory momentum may accelerate deployment.

In the last cycle, top ZK teams raised consistent funding, but many tokens collapsed in secondary markets, cooling the sector. Will this cycle break the “ZK tokens always drop” curse?

Watch two types: strong teams with no token yet and projects with solid business advances and healthy token structures. For now, observe—it's not yet time to go all-in, but don’t be surprised if a few winners emerge.

Policy established, a new order begins

As a long-term sector-focused investor, I know this: the moment regulation lands, structural opportunities are reshuffled. The clarity of this round of U.S. policy is truly changing capital flows and industry order.

Short-term, compliance-driven capital inflows and bullish sentiment have already boosted certain sectors—stablecoin issuers, tokenized assets—with real increases in price and volume. This is only the first test wave of capital. The bigger story is in the long-term reshaping of the industry. With clear rules and high barriers, only truly valuable sectors will remain. Sectors with no real-world demand and built on speculation will fade in a highly regulated environment, and resources will flow to more meaningful fields.

I firmly believe the true opportunity is to adapt to structural change: in the short term, follow policy and capital flows to find the best entry points; in the long run, bet on sectors aligned with the future of finance and technology. I see this cycle as crypto’s "Fourth Internet Epoch." If interested, check my prior articles on web3’s evolution: Like the early Internet—once rules were set and technology transformed the space, there were some growing pains, but the result was a bigger, healthier ecosystem.

Crypto is moving beyond its lawless, wild growth stage and into a mature, rule-based era. Those who capture the policy tailwind now will secure a solid place in the next phase.

The new runway is open—and if you go with the wind, you’ll arrive faster at the future.

Disclaimer:

1. This article is reprinted from [TechFlow], with the copyright held by the original author [Jiayi]. If you have concerns about the reprint, please contact the Gate Learn team; we will address your inquiry promptly according to our procedures.
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