Digital Dry Powder

Managing Editor’s Note: We’re coming up quick on Jeff’s “Project MAFA” briefing.

That’s what Jeff is calling President Trump’s bold new initiative that’s targeting the traditional finance system, potentially creating a “new” gold standard, and launching a Golden Century… and it could happen as early as July 25.

That doesn’t leave us much time to prepare. Jeff’s airing all the details – as well as how you can position yourself ahead of the flood – tomorrow, July 16, at 8 p.m. ET.

So, make sure you add your name to the guest list with one click right here… You don’t want to miss it.

Then read on for today’s issue from senior crypto analyst Ben Lilly. He gets into the catalyst that’s about to set off a surge – sending crypto to new highs and beyond.

While Bitcoin was notching a new all-time high in 2020, there was another area of the crypto market that was already up fivefold.

It was rising well before Ethereum (ETH) and other cryptocurrencies made fresh all-time highs… and now, Treasury Secretary Scott Bessent is saying this same area is expected to rise 14x in the next four years.

This area of the market is stablecoins.

This is important to watch for several reasons, a significant one being that stablecoins tend to accelerate growth in cryptocurrencies. We can think of stablecoins as being a foundational digital asset that greases the wheels for the rest of the crypto industry. Oddly, most don’t draw this connection between stablecoin “dry powder” and other digital assets…but they should.

Looking back at the pattern of stablecoin adoption in 2020 and 2021, we believe the cryptocurrency market is about to go through its biggest growth period yet.

In fact, there’s a major catalyst that’s about to land on the President’s desk any day now.

This catalyst will push many cryptocurrencies to all-time highs and beyond.

Let me explain.

Looking Back

Bitcoin (BTC) notched an all-time high in the middle of December 2020.

It was the token’s first all-time high in three years. Several months later, Ethereum also went on to reach an all-time high, as well as many other smaller-cap coins.

But before the historic rise, money began to flow into another area in the digital asset space – stablecoins.

Stablecoins are blockchain-based tokens that maintain a peg to something in the traditional economy. In this case, these stablecoins seek to keep a value equal to the U.S. dollar.

As more stablecoins enter circulation on public blockchains, they act as potential buying power for assets like Bitcoin, Ethereum, and other tokens.

If we look back to before assets went on parabolic runs at the end of 2020, we find something quite remarkable. For the 12 months leading up to the run, the stablecoin market swelled five times in size.

We can see this growth in the black line below.

This rise was happening well ahead of the explosive growth that overtook the market in 2021.

In the year that followed, we saw wave after wave of coins reach multibillion-dollar market caps.

Larger-cap tokens didn’t just grow, they multiplied:

• ETH went from $200 to nearly $5,000 – up 25x
• Solana (SOL) went from $2 to more than $250 – up 125x
• Binance (BNB) went from $25 to more than $600 – up 24x

Smaller-cap tokens saw even bigger gains with many hitting 100x returns… explosive growth that was fueled by the growth in stablecoins.

Which is what makes the events happening in Washington, D.C., and the comments by Secretary Bessent so exciting.

Stablecoins Are a Priority

The Guiding and Establishing National Innovation for U.S. Stablecoins Act – or GENIUS Act – of 2025 is a piece of legislation that promises to give utmost regulatory clarity to a market that has never had any.

It specifically addresses stablecoins.

What’s incredible is that alongside the recent push to provide the market with greater clarity, Washington, D.C., is also beginning to view the digital asset market as a national security issue.

That’s because stablecoins primarily maintain their peg by holding short-term U.S. Treasuries.

And that means that what happens in the stablecoin market directly impacts the U.S. Treasury market.

The top two stablecoins represent $220 billion in market size. And the total amount of short-term treasuries outstanding is $5.78 trillion.

Meaning stablecoins already make up more than 3% of the supply of short-term U.S. debt.

But here’s where things get interesting.

Treasury Secretary Bessent believes the market cap of stablecoins will explode to $3.7 trillion in the next four years.

When we consider the fact that short-term treasuries will likely make up at least 90% of that figure, stablecoins may hold more than 57% of U.S. short-term debt. More than half!

That makes it a matter of national security for the U.S.

That’s why there’s such a pro-crypto stance coming from the capital. And it is also, in part, why the GENIUS Act has so much bipartisan support.

In fact, the current odds – as seen by crypto-focused prediction market Polymarket – note a 95% likelihood that the bill passes.

Its inevitable passage represents the floodgates opening for stablecoin market growth.

And that’s a good setup for the cryptocurrency market at large…

Looking Ahead

Here’s what that chart from earlier looks like if we zoom out a bit and consider that $3.7 trillion market size.

It’s almost hard to fathom.

But this is in part why we’re starting to see some price targets come out that seem unthinkable.

For instance, Vivek Raman – CEO and co-founder of the Etherealize think tank – recently called a $767,000 price target for ETH. That would be a 255x return from current prices. And the eye-popping figure comes about in part due to the imminent growth of the stablecoin market.

But the massive price targets are not just for ETH.

Cathie Wood’s investment management firm Ark Invest published bear, base, and bull cases that place Bitcoin anywhere from $300,000 to $1.5 million per coin – up 154% to 1,171% from today’s price as I write.

And one of crypto’s largest venture capitalist firms, Pantera Capital, sees Solana’s native SOL token rising towards $1,000. It’s currently sitting around $161. That would be a 521% rise.

These are tokens that already command massive market caps. Bitcoin is already a multi-trillion-dollar market, ETH is more than $360 billion, while SOL is $86 billion.

Meaning the opportunities to get in on the next wave of unicorns are fast approaching. The key to unlocking this growth is digital dry powder.

What most don’t realize is that these stablecoins will fuel the growth of many smaller-cap tokens that reside on these massive public blockchains.

But not every token will benefit. The key is understanding what protocols will benefit from this rise in stablecoin growth. The protocols that will facilitate lending, swapping, and yield generation for the market at large.

This incoming boom for the cryptocurrency market will create a frenzy.

And with the imminent passage of the GENIUS Act, the time to start positioning oneself in the best projects before this catalyst sparks a widespread bull market is now.

Your Pulse on Crypto,

Ben Lilly
Senior Crypto Analyst, Permissionless Investor