Bitcoin Who? Wall Street Has a New Crypto Obsession

For more than a decade, Bitcoin has been the undisputed face of digital finance. When you think “crypto”, you think bitcoin. Its overvoltages and accidents have been treated as Belwethers for the whole industry. This year, he even established new recordings, solidifying his reign.

But for a month, the world of cryptography has not spoken of Bitcoin. The spotlights were stolen by a company that most people have never heard of.

While the Bitcoin price has reached a summit of all time this spring, its domination is disputed. Its market value, although it was still colossal of 2 billions of dollars, suddenly resembles the news of yesterday. Because in the world of finance, Wall Street and social media have a new Internet Darling group: Circle.

On June 5, Circle became public. Its IPO estimated the share at $ 31 per share, evaluating the company at 6.3 billion respectable dollars. What happened then was simply explosive. In just eleven negotiation sessions, Circle’s shares have skyrocketed 675%, pushing its market capitalization to more than $ 48 billion.

To put this in perspective, Circle is now worth more than emblematic industrial giants like Ford Motor Company and General Motors. The three large car manufacturers in Detroit produce millions of physical cars per year. So, what does the circle produce to justify this amazing assessment?

The answer is surprisingly simple: a special type of cryptocurrency called stablecoin.

Here’s how it works. You give Circle an American dollar. In return, they give you one of their digital tokens, called USDC. This token is a stablecoin, which means that its value is fixed at a stable asset. In this case, the dollar you have just given them. It will always be worth $ 1 because, unlike Bitcoin or Ethereum, stablecoins are not designed to fluctuate in value. Circle then takes your real dollar, invests it in safe assets and bearing interests such as short -term US Treasury obligations and the yield. You get a digital dollar; They get profit. This is the whole business model.

What Wall Street buys is not only an intelligent financial loop; It is the hope that stablecoins are the future of money. The dream is that the USDC will become as common as visa or mastercard for daily transactions, allowing people to move inexpensive money and instantly without the volatility of other cryptocurrencies.

This hope is powered by a favorable Washington wind. The Senate recently adopted the “Engineering Act”, historical legislation which opens the door to banks, fintech companies such as Paypal and the main retailers such as Amazon to adopt stabbed for payments. This is the first major cryptography regulation, and in particular friendly, approved by Congress. Although he still has to go into the house, the defenders of cryptography are optimistic.

Until now, stablecoins have been mainly used in the world of cryptography for trading or in decentralized finance (DEFI). But with this new legislation, Circle, which is not linked to a single financial institution, is perfectly positioned to become the big winner. Some call it the “iPhone moment” of the industry.

The fever of the circle rage probably, at least until the company publishes its first quarterly results. It is only then that investors will decide if the honeymoon continues.

In the meantime, if you want to seem that you know what’s going on to Wall Street and in the world of technology, there is a new name to drop.

Bitcoin who?