Why Crypto Matters

Needless to say, the last couple of years in the crypto space have been nothing short of tumultuous. However, even through the trying times, there has still been real life use cases and development that has impacted the lives of millions of people locally and globally. In this edition of Token Advice, we will explore the following ways in which we believe the crypto space is experiencing meaningful adoption. Join us as we explore the following:

Bitcoin

What else can be said about Bitcoin? The most polarizing, oldest, and largest cryptoasset has demonstrated its resilience through some of the darkest of times during the last 15 years. What else would you expect from a technology that was launched during the great financial crisis? The data and statistics about Bitcoin are innumerable and impressive! It has the largest market cap of all cryptoassets at $1.2 Trillion and an ROI of 104,655,755% since inception; including 800K active addresses with transfer volumes over $2B per day. This is just some of the data that proves why Bitcoin is an alluring potential asset for institutional investors and why it’s often debated as a store value commodity, safe haven, pristine collateral. The list goes on and on. At 401, we believe that it continues to be the biggest flashlight in the world, shining a light into the dark corners of financial inequality.

FedNow Service

FedNow is a new instant payment infrastructure developed by the Federal Reserve. It was initially proposed in August of 2019 and ‘finally’ went live July of last year. Why is this so important? We believe that the introduction of Bitcoin to the world ten years prior put pressure on our federal government to address the lack of a real-time payment system for the every day American. Since Bitcoin has became a part of the public lexicon, the narratives around real-time payments became stronger and stronger; and required a solution. At 401, we are excited what FedNow potentially means to lower income Americans, even though it’s a solution that’s inside our existing financial system, not outside of it. This is also why we’re huge advocates for the financial freedoms Bitcoin provides.

24/7 Trading

As a follow up to FedNow, this week it was reported in the Financial Times that the New York Stock Exchange is seeking feedback on whether to institute 24/7 trading. You want to know where they may have gotten this idea from? Crypto Markets! As you may or may not know, as it stands now, the crypto market is always open, trading 24/7/365 since it’s inception. We believe this is just another way crypto market infrastructure will continue to impact traditional markets, while satisfying investor demand; especially as a younger investor base continues to find their preferred methods of trading, storing, and transferring cryptoassets.

Tokenization/RWA

“Tokenization” has been a buzz word in the space for some years now, but recently it has become a major part of the crypto space’s growth. The two most notable examples are the BlackRock and Franklin Templeton Tokenized Money Market Funds. Franklin Templeton had the first U.S. registered fund and was launched in 2021. As it stands now, the total assets under management in tokenized government securities is more than $1B. To us, this signifies the staying power and utility of blockchain technology; but more importantly a major statement that two of the largest and most notable financial brands are leading the way in blockchain utilization and the tokenization of real world assets.

Stablecoins 

It’s safe to say at this point stablecoins, (or crypto dollars as we like to call them), are the most successful crypto use case to date. According to RWA.xyz, there are now 93.5M crypto addresses that hold stablecoins and is on track to reach 100M within the next few months. They are also on pace for $20T in settlements in 2024. According to Visa, in the space of six years, stablecoins have gone from zero to near parody with their existing business.

To further our point about stablecoin adoption, as we are writing this, today there were two major announcements from two of the largest payment players in the world. Visa has built out an On-chain Analytics Dashboard that highlights all stablecoin activity globally. In addition, Stripe announced it would let customers accept crypto payments using the stablecoin USDC on the chains Solana, Ethereum, and Polygon. Lastly, the largest stablecoin, Tether, recently announced a partnership with TON, Telegram Open Network. This deal deploys Tether onto the blockchain of Telegram and opens the door for native usage of Tether to the almost billion Telegram users.

We will continue to explore more examples of growth in the space, (especially onchain), in future editions of the newsletter. As a registered investment adviser, we will continue to research, educate and advise in the crypto ecosystem with the hopes of providing accessible, affordable, and personable financial advice for all. We are bullish on the future of crypto and if you’re interested in something that we are working on and are excited about, check the link here! Generational Labs is a subsidiary of 401 Financial, Inc; where we do all of our crypto exploration and building.