The “Nvidia” of Cryptocurrency

Bitcoin (BTC) is a once-in-a-lifetime asset. Its price has soared 40 billion times since 2009, enough to turn a small $100 investment into $4 billion. I know many people who bought Bitcoin early and had their lives changed by it. Several smaller cryptocurrencies have followed in Bitcoin's footsteps. As the regulatory environment eases, more cryptocurrencies will see growth.

However, despite its rapid growth, the cryptocurrency market is still small. Microsoft (MSFT) alone is worth more than Bitcoin and all other cryptocurrencies combined! Why is this the case? Until recently, the cryptocurrency market was dominated by individual investors, with few big Wall Street institutions involved. Even when Wall Street occasionally invested in cryptocurrencies, it almost exclusively bought Bitcoin. This is a big reason why Bitcoin accounts for nearly two-thirds of the entire cryptocurrency market.

But that era is ending. Wall Street money is starting to flow into smaller cryptocurrencies. This presents us with an opportunity, and here’s how we can profit from it…

Wall Street was “substantially prohibited” from investing in small-cap crypto

I use the word “substantially” because there was no explicit law prohibiting investing in small-cap crypto, but the previous administration put enormous pressure on crypto innovators and investors. Crypto banks were shut down by the government, founders and funds were prosecuted and “debanked,” and protocols were subject to constant surveillance. As a result, innovation stagnated and capital dried up. Who wanted to risk jail time and a ruined life?

But now things are changing. The U.S. House of Representatives just wrapped up “Crypto Week,” during which lawmakers voted on three new cryptocurrency bills:

• The GENIUS Act would provide the first true stablecoin framework for the United States.

• The Anti-CBDC Surveillance State Act would prohibit Washington from creating a government-controlled stablecoin.

• The CLARITY Act would address the thorniest regulatory issue in crypto: how tokens are classified.

In short, these bills legalize crypto. The House has passed all three bills, and Trump has signed the GENIUS Act into law. Meanwhile, the Anti-CBDC and CLARITY bills are headed to the Senate. This is a major win for crypto.

These three bills are part of a broader push to legalize crypto. Regulatory clarity is key to unlocking trillions of dollars on Wall Street and will unleash a wave of innovation in crypto.

Wall Street’s ultimate goal is…

Tokenization. The real disruptive power of blockchain is that it eliminates the middleman and enables a banker-less financial system. We’ve already seen this in the “killer use case” of cryptocurrency – stablecoins. They are the only way to send $10,000 to a friend around the world in seconds on a mobile phone at a cost of less than a penny. All because they avoid middlemen like Western Union, PayPal, and banks.

Stablecoin adoption is rising rapidly. The total value of stablecoins in circulation has reached $250 billion, which is more than the amount of physical currency in Canadian dollars or British pounds. Stablecoins are the tokenization of the US dollar. Next, all real-world assets such as stocks, bonds, real estate, oil barrels, and art will be on the chain. The total value of real-world assets worldwide is estimated to be more than $250 trillion. This is the market potential we are talking about.

Wall Street is at the forefront of tokenization. BlackRock, the world’s largest asset management company, recently launched a tokenized Treasury fund. Franklin Templeton, another Wall Street giant, has done the same with its money market fund. Robinhood began offering users tokenized shares of private startups like OpenAI and SpaceX in Europe. JPMorgan Chase, UBS, Visa, BNY Mellon, PayPal… there’s hardly a Wall Street firm that isn’t migrating to the blockchain. Even city-states are getting in on the action, like Dubai recently tokenizing an entire building.

The current financial infrastructure hasn’t changed in decades, yet it processes trillions of dollars in transactions every day. Imagine how much more momentum cryptocurrencies will get when these huge sums start flowing on the blockchain, and how much money companies like BlackRock will save by eliminating the middleman.

The best way to make money in the first phase of tokenization is…

Invest in quality cryptocurrency businesses that are building the plumbing for a new financial system. Think of the best way to make money in the AI boom of the past three years: buy infrastructure providers like Nvidia (NVDA). The same is true in the cryptocurrency space.

Most tokenized assets—from stocks to tokenized treasuries to stablecoins—run on Ethereum (ETH). BlackRock, Robinhood, Visa, PayPal, Stripe, and JPMorgan Chase are all built on Ethereum. Ethereum is quickly becoming the settlement layer for a new blockchain-based financial system. As more assets come on-chain, Ethereum will earn more fees, driving up its price.

I like to think of Ethereum as the "Nvidia" of cryptocurrencies, the biggest winner in the first phase of construction and a must-hold asset. But it won't be the only winner. There is an emerging class of smaller, faster, and more specialized protocols designed specifically for tokenization. Some focus on tokenized treasuries, some are designed for custodial real-world assets like real estate, and some are redefining lending. These projects are currently small, equivalent to "nano-cap" companies in the stock market. But as Wall Street money pours in, these platforms are expected to outperform other major cryptocurrencies.