Jeff Dorman, Chief Investment Officer and co-founder of Arca, says stablecoins, tokenization and DeFi are the only crypto use cases clearly growing, and that Bitcoin offers exposure to none of them.
We've had a ton of experiments over the last 15 years in crypto, most of which have failed, right?
You know, social trading has failed miserably, gaming, NFTs, all this stuff has failed.
The only three things that are clearly up into the right and without a doubt growing are stable coins and payments, like undeniably, right?
Even even with the recent blip post the Binance hack where where stable coin AUM has fallen 15 billion,
over a longer time horizon, like AUM of stable coins is growing and payments and transactions are definitely growing, right?
Like, you know, all of Wall Street is now in this, all the banks are looking at this, like stable coins and payments are not going away. That's that's use case number one.
Use case number two is the tokenization of assets, right?
You could argue that all of crypto to date has just been one giant experiment because, you know, all we did was make up a bunch of crypto assets, 99% of which have no value and a few of them do.
And we're testing the blockchain rails to see if they work. And now that we've proven they work, now the real assets are coming, right?
There's 700 trillion of bonds, stocks, real estate and commodities that are eventually moving their way on chain.
Again, you look at any graph of RWA tokenization and it's up into the right, right?
There's just more and more tokenized assets, more and more trading volumes of tokenized assets.
I mean even Binance and hyper liquid are effectively just stock trading platforms now because people have just largely stopped trading the nonsense crypto assets that that that haven't amounted to anything.
And then the third use case is Defi, which ties all of that together, right?
When you have more assets on chain and you have more dollars on chain via stable coins, you're going to have a place to borrow and lend and trade those assets.
And that's why every chart in Defi is up into the right as well. Like Defi used to be less than 1% of total crypto transactions relative to like Coinbase and Binance and the centralized exchanges.
Now, Defi transactions are 25% of all volume and that's just going to continue to grow.
So, you have three viable use cases of crypto right now. Stable coins and payments, RWA tokenization and the connector of the two, which is D5.
So, if you wanted to make a very lazy argument and say, well I want exposure to all three of those, what should I buy? The answer would be Ethereum, right?
Because Ethereum does loosely give you exposure to all three of those, right?
It's probably the most generic way to get exposure to all three of the growth assets.
By the way, I didn't mention Bitcoin because Bitcoin gives you exposure to none of those things, right? Bitcoin is this anomaly that at this point shouldn't even be connected to crypto because it's a totally unique different asset that has nothing to do with the growth of blockchain.
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