This is the fastest growing asset class you've never heard of.

Welcome 208 new subscribers since last week's newsletter!

This is the fastest growing asset class you’ve never heard of.

And this is why crypto adoption will continue to accelerate.

Check out the growth of this asset between January 1, 2020 and today:

January 1, 2020 market cap - $520 million

Today's market cap $52 billion - a 9,900% increase in size

What is this mysterious investment?

A hot new biotech fund? The latest AI-focused ETF??

Nope, it’s a stablecoin - USD Coin (USDC).

In the last year, there has been over half a trillion dollars in USDC transactions volume.?

For perspective, that’s about 50% of the total payment volume for PayPal in 2020.

What’s a stablecoin?

USDC, in this case, is designed to maintain price equivalence to the U.S. dollar.

USDC is fully-backed by cash and short-dated U.S. treasuries, and these reserves are held in the custody of leading financial institutions.?

How are stablecoins used?

Let’s say you want to wire some money from your bank to another. You’ll pay about $50, and if the wire is international, you’ll wait several days for the payment to settle.

USDC, like other cryptocurrencies, are geographically agnostic and permissionless.

This means you can send the equivalent of U.S. dollars to anyone in the world at any time, without asking anyone else to approve the transaction.

Why will this lead to higher adoption of cryptocurrency?

There’s an oft-repeated phrase in crypto and blockchain (the technology upon which crypto is built): “This is a solution looking for a problem.”

Money transfers between individuals or companies currently use an antiquated, expensive technology, and that’s a problem. USDC, and other cryptocurrencies, solve this problem by allowing anyone with an internet connection to send money cheaply and instantly to others.

Unlike other cryptos, though, which may vary wildly in price, $1 of USDC is the equivalent of $1 U.S. dollar.?

This feature of USDC mitigates/eliminates currency risk in either holding the asset or using it for foreign transactions.

What does this mean to you and your clients?

If you or someone you know has bought cryptocurrency, it’s probably Bitcoin, Ethereum or another investment that fluctuates in price.

Experience with these investments can be positive (if the number goes up) or negative (if the number goes down).

USDC and other stablecoins are a great entry point for crypto because it takes the price fluctuation risk off the table.

Instead of a feeling equivalent to gambling, causing a love/hate relationship with crypto, stablecoins allow its users to build a positive association with this new internet of money.

What’s the future for stablecoins?

I wouldn’t be surprised if the market caps of USDC and other stablecoins eventually are the largest in the entire crypto markets. The use cases abound, and based on the astronomical growth over the past few years, I expect more & more money to flow into stablecoins.

What Spencer has been doing lately:

I really, really enjoy training groups on this fantastic new technology.?

In the past few weeks, I’ve:

1. Spoken in-person for a wirehouse event in Atlanta
2. Helped build a Web3 strategy for the World’s Largest Music Festival (Summerfest)
3. Did an advanced-level Q&A session with an angel investing group re: contagion from aggressive crypto lending

In November, I’ll be doing my first presentation for the Department of Justice on digital asset forensics as well.

Would you like me to train you & your team? Drop me a message here on LinkedIn.

Next week’s newsletter preview:

The world's second-largest cryptocurrency (Ethereum) will be undergoing a huge change in just a few weeks.

Some say it will propel ETH into the stratosphere, while others say it will doom the project. 

We'll break down the bull & bear case

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Thanks for reading! - Spence

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