I went down a little bit of a rabbit hole the other day trying to learn about accessing the crypto industry via individual stocks. I am not talking about buying cryptocurrencies other than Bitcoin which I own and I don't mean Bitcoin treasury companies like Strategy. The context here is more like plumbing or maybe infrastructure is a better word and even then we may need to dial that in a little bit.
Here's some help from Mathew Tuttle with Stablecoins 2.0: The Infrastructure Race. That's where I got the word infrastructure from. He asked AI to rank out the prospects for different segments in this niche. Included were the two big credit card companies (clients have owned Mastercard for more than ten years). My thought about how MA evolves through this is that digital payments and all the rest isn't going to happen without them. We'll see how much of a leader they are as this evolves but it's not going to happen around them, leaving them completely behind.
Coinbase was listed out in Mathew's study and while of course they could become the Schwab of crypto (maybe they already are), client holding Schwab might become the Schwab of crypto. Sidebar, if you were in markets in the late 90's into the early 2000's, that last line might remind you of Alberto Vilar saying that Yahoo was going to be the next Yahoo.
A little more interesting to me in terms of really being infrastructure is Circle Internet Group (CRCL) which just IPO'd at $31, went straight to $250 and has been hovering between $200-$220 for the last couple of weeks. Its stablecoin is USDC which is the second largest after Tether. It's market cap is around $60 billion which is about 25% of the entire stablecoin space. The valuation of CRCL might be a little bit stretched, it's also more than 20x revenue.
Back to the credit card companies and we can throw in many other financial companies, what happens to CRCL when they all jump in with their own stablecoins? Does a large market share today mean anything in the context of 2028 or 2030? I have no idea yet but this will be fun to learn about.
Part of this stablecoin quest included looking at the Kinetics Internet Fund (WWWFX). How long has it been since you thought about that one. It goes back to the bubble days. It launched shortly before the bubble popped and went down almost 80%. Also going back that far is the Kinetic Paradigm Fund (WWNPX), I don't remember that one.
The current holdings overlap with a lot of Bitcoin and a lot of Texas Pacific Land (TPL). That's an interesting combo for the very low correlation between the two.
Looking at the long term chart, log scale, these are fascinating but man, what a tough way to make a living. Yikes.
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