ATOM rose by 4% on Wednesday after Cosmos executives terminated EVM development to concentrate on blockchain interoperability by advancing its own IBC protocol.

The news was met well by investors as it sees Cosmos extend its position as a standalone blockchain with its own tech stacks it can rely on.

The wider market is also up on Wednesday as investors begin to question whether the market is entering a long-awaited «altcoin season,» with a number of data points suggesting capital is shifting from BTC to altcoins like ATOM.

Technical Breakout Signals Bullish Reversal

• ATOM-USD surged 4% in 24-hour trading from July 15 16:00 to July 16 15:00, breaking through resistance at $4.69 to hit $4.71 highs.
• The token bounced sharply from $4.55 support, posting a $0.17 trading range that represents significant volatility expansion from recent sessions.
• Volume spiked above daily averages during the $4.55 reversal and $4.69 breakout, confirming institutional buying interest at key technical levels.
• Intraday action from July 16 14:33 to 15:32 shows continued momentum with $0.05 range between $4.66-$4.71 support and resistance zones.
• ATOM broke higher at 14:45, hitting session peaks near 15:04 on volume exceeding 66,000 units before consolidating around $4.69.
• The 1% hourly gain extends the 24-hour rally, with price holding above $4.66 support signaling sustained institutional accumulation.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk’s full AI Policy.

With the expected passage of the GENIUS Act this week, the $260‑billion stablecoin market is on the cusp of becoming a formally regulated part of the U.S. financial system.

The next step is institutional, bringing the time‑tested model of clearinghouses into the world of tokenized money.

Why clearing matters

Traditional clearinghouses, formally called central clearing counterparties, stand between buyers and sellers, netting exposures, collecting collateral and mutualizing losses if a member defaults. That plumbing is mundane until something breaks; then, it becomes the firewall that prevents a localized shock from becoming a systemic risk. Recognizing the “too‑central‑to‑fail” profile of these utilities, the Financial Stability Board spent 2024 writing new global standards for their orderly resolution.

Enter stablecoins, at global scale.

They promise dollar‑for‑dollar redemption but trade on borderless blockchains where liquidity can evaporate in near real—time. Today each issuer is its own first and last line of defense; redemptions pile up exactly when asset markets are least forgiving. Stablecoin clearinghouses would pool that redemption risk, enforce real‑time margining, and give regulators a control panel for data and a toolbox for crisis intervention.

To be sure, many will think that clearinghouses are anathema to a decentralized financial system, but via the Genius Act, D.C. and Wall Street are sending signals for the stablecoin industry to follow.

Congress has already nudged us there

Buried in Section 104 of the GENIUS Act is a quiet endorsement of central clearing: stablecoin reserves may include short‑term Treasury repo only if the repo is centrally cleared (or if the counterparty passes a Fed‑style stress test).

That small clause plants a seed. Once issuers must interface with a clearinghouse for their own collateral management, extending the model to the tokens themselves is a short conceptual hop –especially as intraday settlement windows shrink from hours to seconds.

Wall Street sees the opportunity

The Depository Trust & Clearing Corporation (DTCC) — the utility that processes $3.7 quadrillion of securities every year — confirmed in June that it is “assessing options” to issue its own stablecoin. Meanwhile, a consortium of the largest U.S. banks — backers of The Clearing House real‑time payments network — is exploring a joint bank‑backed stablecoin, explicitly citing their clearing expertise as a competitive advantage.

As either of these, or other yet to be publicly announced ventures, proceed forward, the risk‑management stack that they bring to market will likely become the dominant blueprint. (Bank of America and Citi have both said recently they want to issue their own stablecoins.)

New governance models are in motion

The Bank for International Settlements said this month that stablecoins still “fall short” of sound‑money tests and could trigger “fire sales” of reserves without robust guardrails. If a mammoth player were to join a clearinghouse and then falter, the default could dwarf margin funds, raising too‑big‑to‑bail questions for taxpayers. Governance will likely converge on a bespoke framework; designing a charter that satisfies international regulators eyeing cross‑border spillovers will require the kind of multilateral horse‑trading typical of Basel committees.

How a stablecoin clearinghouse would work

1. Membership & capital – Issuers (and possibly major exchanges) would become clearing members, posting high‑quality collateral and paying default‑fund assessments just as futures brokers do today.
2. Netting & settlement – The clearinghouse would maintain omnibus on‑chain accounts, netting bilateral flows into a single multilaterally netted position each block, then settling with finality by transferring stablecoins (or tokens representing reserve assets) between members.
3. Redemption windows – If redemption queues spike beyond preset thresholds, the utility could impose pro‑rata payouts or auction collateral, slowing the bleed long enough for orderly asset sales.
4. Transparency & data – Because every token transfer touches the clearinghouse’s smart contract, regulators would gain a real‑time, consolidated ledger of systemic exposures — something impossible in today’s fragmented pools.

Congress is codifying the reserve and disclosure rules. Wall Street is preparing the balance‑sheet heft. And global standard‑setters are already sketching the resolution playbooks.

CryptoExpect niche institutional use cases to dominate early — collateral mobility, overnight funding — resulting in intraday liquidity savings for institutions and a public‑good risk shield for the Fed. If crypto consortiums do not step in, TradFi-style clearinghouses will dominate the landscape.

Let’s be honest.

Last month, I released a white paper explaining that conservative investors should allocate 10% to crypto, moderate clients should invest 25% and aggressive investors should place 40% of their portfolios into crypto.

Bitcoin has outperformed every other asset class for 12 of the past 15 years, and it’s highly likely that it will continue to do so for years to come. Institutions are investing like never before. Congress and the administration now fully support crypto, and we’re beginning to get the regulatory clarity we’ve wanted.

The SEC and FINRA’s prohibitions that blocked brokerage firms from trading or custodying crypto have been rescinded. The OCC and the Fed have revoked similar prohibitions against banks, and the Department of Labor has rescinded its objection that prevented 401(k) plans from offering bitcoin as an investment option.

Despite the growth and performance of bitcoin, I keep seeing suggestions that people ought to allocate only 1 or 2 percent to crypto. In my opinion, that is no longer enough. Crypto is no longer speculative. It is no longer niche. It now deserves to be treated as a core allocation.

Consider this hypothetical illustration, comparing a traditional 60/40 portfolio of stocks/bonds to portfolios that hold 10 percent, 25 percent or 40 percent in bitcoin. Let’s assume we invest $100 for five years, earning 7 percent annually in the 60/40 allocation. Let’s also look at two extreme outcomes: bitcoin either becomes worthless, or it rises in five years to $1 million (roughly a 10x increase from today).

As you see in the chart below, the $100 invested in the 60/40 portfolio rises to $140 after five years. Not bad. But the portfolio with a 25 percent bitcoin allocation could be worth more than 250 percent more. Even if bitcoin were to become worthless (and you held it all the way to zero), your portfolio would still be profitable – with a value above your original investment. Seems to me that the risk/reward ratio strongly favors a significant crypto allocation – and certainly one that’s far higher than a measly 1 or 2 percent.

Potential Range of Portfolio Returns Based on Bitcoin Allocation

Bitcoin’s price appreciation isn’t speculation – it’s just supply and demand. In Q1 2025, public companies purchased 95,000 bitcoins – more than double the new supply. And that’s from just one category of buyers – it ignores additional demand from retail investors, financial advisors, family offices, hedge funds, institutional investors and sovereign wealth funds. This massive imbalance between supply and demand is driving bitcoin’s price to all-time highs. I predict that bitcoin will reach $500,000 by 2030 – a 5x increase as of this writing.

The adoption curve has tremendous room to run – supporting the thesis that there is substantial upside yet to come in bitcoin’s price. Read the white paper for more.