Stablecoin Tides: A Portfolio Manager’s Glimpse

by

The crypto market’s stablecoins have surged like a tempest, leaving investors and policymakers scrambling. Treasury Secretary Bessent called them a “paradigm shift,” but beneath the rhetoric lies a story of grit and grind. For the worker who swaps hours for tokens, or the trader clutching dollars in a volatile world, stablecoins are more than numbers—they are lifelines. Yet, the machinery behind them grinds with the same indifference as any capitalist engine. Let’s parse the figures, but keep one eye on the people they shape.

$250 Billion

The stablecoin industry’s growth from $20 billion to $250 billion in five years is a tale of digital gold-rush fever. Six percent of the $4 trillion crypto market may sound modest, but it’s a colossus in the making. Tether (USDT) and USDC (USDC) now rank fourth and seventh among cryptocurrencies, their market caps bloated with the savings of millions. Yet, for every dollar locked in these coins, there’s a warehouse worker in Manila or a Uber driver in São Paulo who sees only the promise of stability—and the shadow of risk.

When Bessent whispers of $2 trillion in a few years, he speaks to the titans. The rest of us? We’re the ants underfoot, hoping the floorboards hold. The industry’s scale is undeniable, but its fragility is etched in the fine print of redemption clauses and reserve audits. A stablecoin’s promise is a fragile thing, like a peasant’s trust in a nobleman’s word.

200

Two hundred stablecoins now float in the crypto sea, most as thin as paper money. The top two, Tether and USDC, hoard 90% of the market, while the rest flounder like fish out of water. The “vanilla” dollar-pegged coins are the Treasury’s darlings, but the wild ones—yen-backed, euro-backed, algorithmic—are the gambles of the desperate. A farmer in Kyoto might trade in yen-stablecoins, while a Berlin freelancer bets on euros. But when the music stops, who’s left holding the tab?

The Genius Act’s promise of deregulation is a wolf in sheep’s clothing. Retailers and tech giants will flood the market with stablecoins, each a new brand of snake oil. A Cambrian explosion of tokens, yes—but also a graveyard of failed experiments. The worker will pay the price when the hype collapses. Still, the dream of financial sovereignty lingers, a siren song for the dispossessed.

$13 Billion

Tether’s $13 billion profit in 2024 is a modern miracle. With fewer than 200 employees, it out-earns JPMorgan’s 300,000-strong army. Cathie Wood calls it “stunning,” but what of the millions who trust Tether’s $1 peg? For every dollar earned in spreads, there’s a nurse in Lagos or a student in Buenos Aires who can’t cash out at par. The business model is a marvel of efficiency—but efficiency is the enemy of justice. When the books are audited, will the people’s faith be repaid, or will it all unravel like a poorly woven net?

How to choose the right stablecoin for your portfolio?

Investing in stablecoins directly is like buying a loaf of bread and expecting it to multiply. They’re designed to stay flat—$1 in, $1 out. But the real gold lies in their issuers. Circle (CRCL), the USDC parent, is a case study in ambition. Up 130% since its IPO, it’s the poster child for stablecoin capitalism. Yet, its rise is built on the backs of users who never see a cent. For the portfolio manager, it’s a bet on the future—but for the worker, it’s a gamble on survival.

Loading widget...

Until Tether goes public, Circle is the closest thing to a stablecoin “pure play.” But let’s not confuse growth with integrity. The market’s tides will rise and fall, and the common man will be the last to know. For now, we watch, we wait, and we hope the next wave doesn’t drown us. 🌊

Read More

2025-08-05 06:26