Bitcoin (BTC) is the asset of a lifetime.
It’s soared 40,000,000,000% since 2009, enough to turn a small $100 investment into $4 billion.
I know many folks who bought bitcoin early and made life-changing money.
A few smaller cryptos have followed in bitcoin’s footsteps. And with the regulatory thaw now underway, many more will.
And yet, for all its growth, crypto is still a tiny market.
Microsoft (MSFT), just one company, is worth more than bitcoin and all other cryptos combined!
How is that possible? Until recently, crypto was a market dominated by individual investors. Wall Street, the big boys, barely touched it.
And in the rare times Wall Street firms did invest in crypto, they bought bitcoin pretty much exclusively. That’s one big reason why bitcoin comprises nearly two-thirds of the entire crypto market.
But that era is ending.
Wall Street money is finally starting to move into smaller cryptos.
This is our opportunity—and here’s how we’ll profit from it...
- Wall Street was essentially banned from investing in smaller cryptos.
I say “essentially” banned because there wasn’t a specific law against it. But the prior administration made life miserable for crypto innovators and investors.
Crypto banks were shut down by the government. Founders and funds were sued and “de-banked.” Protocols were subject to constant surveillance sweeps.
So, innovation stalled, and capital dried up.
Why risk going to jail and having your life ruined?
But that’s now changing before our eyes. The US House just concluded “Crypto Week,” during which legislators voted on three new crypto bills.
The GENIUS Act would give the US its first real stablecoin framework.
The Anti-CBDC Surveillance State Act would ban Washington from ever creating government-controlled stablecoins.
And the CLARITY Act would address the single most painful regulatory issue in crypto: how tokens are classified.
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In short, these bills make crypto legal.
The House approved all three bills. Trump already signed GENIUS into law. Meanwhile, Anti-CBDC and CLARITY are moving on to the Senate. It’s a big win for crypto.
The three bills are part of the wider push to legitimize crypto.
As we’ve been discussing in RiskHedge Venture for years, regulatory clarity is the key to unlocking trillions of dollars of Wall Street funds…
And unleashing a wave of innovation in crypto.
- The grand prize for Wall Street is…
Tokenization.
The real disruptive power of blockchain is that it cuts out middlemen. It’s banking without the bankers.
We’ve already seen this happen with crypto’s “killer use case”—stablecoins.
They’re the only way to send $10,000 to a friend halfway around the world in seconds, from your phone, for less than a penny. All because they avoid middlemen like Western Union (WU), PayPal Holdings (PYPL), and banks.
And adoption is rising rapidly. The number of stablecoins in circulation recently hit $250 billion. That’s more than physical Canadian dollars or British pounds in circulation.
Stablecoins = the tokenization of the US dollar. Next, every stock, bond, piece of real estate, barrel of oil, and work of art is moving on-chain.
The total value of all real-world assets is estimated to be over $250 trillion. That’s the kind of market potential we’re talking about here.
And Wall Street is at the vanguard of tokenization.
BlackRock (BLK), the world’s largest asset manager, recently launched a tokenized Treasury fund.
Franklin Templeton, another Wall Street giant, did the same with one of its money market funds.
Meanwhile, Robinhood (HOOD) started offering tokenized shares of private startups OpenAI and SpaceX to users in Europe.
JPMorgan Chase & Co. (JPM), UBS Group (UBS), Visa (V), BNY Mellon, PayPal… There’s hardly a Wall Street company that’s not moving onto the blockchain.
Even city states are getting involved. As we discussed last week, Dubai just tokenized an entire building.
Today’s financial infrastructure hasn’t changed in decades. Yet it handles trillions of dollars of transactions every single day.
Imagine what kind of boost crypto will get when these vast sums of money start flowing on the blockchain.
And imagine all the money firms like BlackRock will save by cutting out the middlemen.
- The best way to profit from Phase 1 of tokenization is…
Invest in quality crypto businesses building the pipes of this new financial system.
Think about the best way to make money from the artificial intelligence boom over the past three years: buying infrastructure providers like Nvidia (NVDA). Same in crypto.
Most tokenized assets—from stocks to tokenized Treasuries to stablecoins—all run on Ethereum (ETH).
BlackRock, Robinhood, Visa, PayPal, Stripe, and JPMorgan are all building on top of Ethereum.
Ethereum is fast becoming the settlement layer for the new blockchain-based financial system.
And as more assets move onto its chain, Ethereum earns more fees, lifting its price.
I like to think of Ethereum as the “Nvidia of crypto.” It’s the first big winner. It’s the one to own in Phase 1 of the buildout.
But it won’t be the only winner.
There’s a new class of smaller, faster, and more specialized protocols that are built for tokenization from the ground up.
Some focus on tokenized Treasuries. Some are engineered to host real-world assets like real estate. Some are reinventing lending and borrowing.
These are tiny projects today. They’d be considered “nanocaps” in the stock market. But as Wall Street floods into crypto, these platforms stand to outperform every other major crypto.
You can read more in my new breaking update.
Go here to see how to capitalize on this opportunity.
Stephen McBride
Chief Analyst, RiskHedge