BitMEX co-founder Arthur Hayes believes the US laws in search of to determine a framework for dollar-pegged stablecoins can be bullish for Bitcoin (BTC) and main banks.
In a brand new essay, Hayes says the Guiding and Establishing Nationwide Innovation for U.S. Stablecoins (GENIUS) Act will unlock trillions of {dollars} in liquidity and increase markets.
In response to Hayes, the GENIUS Act, which was passed within the U.S. Senate final month and is now ready to be tabled on the ground of the U.S. Home of Representatives, will enable too-big-to-fail (TBTF) banks to situation stablecoins and unlock as much as $6.8 trillion in liquidity.
TBTF banks, which embrace megabanks reminiscent of JPMorgan Chase, Financial institution of America, Citigroup, and Wells Fargo, are massive monetary establishments so essential to the financial system that their failure could be catastrophic for the worldwide monetary system.
In mild of the GENIUS Act, Hayes says one of the best wager will not be investing in non-bank stablecoin issuers reminiscent of Circle.
“The actual stablecoin play isn’t betting on crusty FinTechs like Circle—it’s understanding that the US authorities simply handed TBTF banks the launch keys to a multi-trillion-dollar liquidity bazooka disguised as ‘innovation’…
As an alternative, go lengthy Bitcoin. Go lengthy JPMorgan. Overlook about Circle.”
In response to the BitMEX co-founder, the elevated liquidity arising from permitting banks to situation stablecoins, in addition to different fiscal coverage measures, might ship “Bitcoin pumping 10x to $1 million.”
The shares of the megabanks, alternatively, might soar by practically 3x because of the GENIUS Act, per Hayes.
“If we take the typical price-to-earnings ratio of the TBTF banks at 14.41x and multiply that by the price financial savings and stablecoin NIM (internet curiosity margin) potential, it comes out to $3.91 trillion. The present market cap of the eight TBTF banks is roughly $2.1 trillion, which implies that stablecoins might pump TBTF financial institution shares on common by 184%.”
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