Wall Street Admits Crypto Is an Unstoppable Force
When the dot-com bubble burst, most investors believed the internet was a passing fad.
They thought it was like Beanie Babies or Cabbage Patch Kids.
The Nasdaq Composite Index was down 90% from its highs. And some dot-com stocks had one-way tickets to zero.
The media had lots of skeptics. They said consumers would never use the internet — it was too full of scams and theft.
Every day brought new stories of stolen passwords and credit card fraud.
But the number of internet users kept growing.
Slowly at first … then suddenly everything you needed to order, every bill you needed to pay and every connection you needed to make was online.
Our devices are now intertwined with the internet:
- My Ring cameras alert me to movement in my backyard.
- My Alexa device will play my daughter’s favorite Frozen song on command.
- And my sprinklers even know not to turn on when it rains.
The same skeptics are chirping again: “Crypto is a fad.”
“It’s for drug dealers and scam artists,” they say. “It will never amount to anything.”
As if they never learned their lesson when an unstoppable technology arrives.
I have no doubt that decentralized finance (DeFi) is going to consume the banking system.
It will be like how Amazon ate brick-and-mortar retail in the last decade.
And today’s news solidifies my belief.
The World’s Largest Asset Manager Is Now in Crypto
There’s an old saying: “If you can’t beat ‘em, join ‘em.”
When cryptos first arrived on the scene, Wall Street famously dismissed them.
JPMorgan Chase CEO Jamie Dimon called bitcoin a “scam” and a “fraud.” He said he would fire employees caught trading the digital asset.
More recently, Berkshire Hathaway’s Charlie Munger said: “Bitcoin is worthless rat poison.”
But Wall Street is starting to recognize this unstoppable force. And it’s moving quickly to capitalize on this new digital asset class.
Circle, which issues USD Coin (USDC), announced this morning that it raised another $400 million in funding.
What was more impressive about the announcement is where that money is coming from.
It’s a group that includes asset management firm Fidelity, which already has a crypto platform.
But the bigger news was that BlackRock, the world’s largest asset manager, is now an investor in Circle.
As reported by Bloomberg, BlackRock is “exploring capital-market applications for USD Coin, in addition to serving as a primary asset manager for the stablecoin’s cash reserves.”
Recently, BlackRock CEO Larry Fink said the company is studying how it can use cryptos to help clients.
“We believe digital assets and blockchain technologies are going to become increasingly relevant for BlackRock and our clients,” COO Rob Goldstein and Salim Ramji, global head of ETFs and index investments, wrote in a memo to employees today.
This news will make USD Coin the de facto stablecoin for decentralized finance.
Cryptos Will Make the Old Financial System Obsolete
USD Coin is a stablecoin because a dollar held in a bank backs each token.
By creating a crypto token, that dollar can now be sent instantly around the world.
It can earn a yield in decentralized finance. And it can be programmed to pay out under certain conditions.
Many of these new crypto-enabled transactions will make the old financial system obsolete.
That’s why this news that BlackRock is backing USD Coin should put the skeptics at rest.
Wall Street sees what’s coming, and it knows it can’t beat ‘em.
So make sure to watch my special presentation this Thursday.
It’s about one crypto that has the power to transform the $100 trillion global financial industry.
I’m excited about this opportunity and I can’t wait to share my research with you later this week.
Editor, Strategic Fortunes
From open till noon Eastern time.
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My career on Wall Street started while I was in college. I spent a summer interning for Merrill Lynch in the middle of the ‘90s bull market. I was fascinated with trading, and as a result, after college, I joined Salomon Brothers in the famed mortgage bond trading department. Later, I spent time at Citigroup working with credit derivatives. Eventually, I needed to walk away from the excess of Wall Street. That’s when I joined Banyan Hill in 2017. Now I help readers get ahead of the market and build their retirements.