Author: Thomas Connolly

For many years the wish in the crypto sector was for a killer App that would bring millions, if not billions of people to the world of digital assets and blockchains. We all became expectant parents waiting for the baby to arrive similar to Email and virtual retail that caused internet use and investment. We were looking for the wrong type of App or product. The day of accelerated adoption is happening now. Regulation is favorable, a needed ingredient to advance confidence. But what is the product or service that has been missing?

Stable coins! They are exploding and offer a worldwide reservoir of US Dollar assets in token form that is needed/wanted by foreign governments, global companies, and the world’s population that trust the reserve currency status of the US Dollar and the US Economy. White label US dollar stable coin cards will be sold at retail. Tokenized money movements will explode driven by the desire to have liquid assets in US Dollar equivalents. Banks and financial institutions are embracing this. Crypto adoption by PayPal, Venmo, JP Morgan, and others is accelerating through stable coins. The public will no longer labor over exchange transactions, private keys, account log-ins across multiple platforms, and the other frustrations that kept them out of the world of digital platforms. People will begin the journey into a new financial world with higher confidence and a sense of understanding of the power of the US Dollar and the store of value in Bitcoin and Ether.

Pay attention to your normal world and look for signs of availability and use of these stable coin vehicles. The rate of change is accelerating, and this presents great opportunities for new and old businesses and financial service providers. Catch the wave……it will be one helluva ride, one that is complimented and energized by AI.

Cheerleading from the investors table for the turn upwards to dominate the future. Be careful, this could be a headfake but the capital flows are refocusing in a good way.

Picking a bottom or a top is typically a fools game. Best to wait for confirmation that the move off of a low or high point is more than noise. The most recent chart of a potential bottom forming is not for the timid. High risk and reward are at play right now. Be careful.

I posed the above question to ChatGPT. This was the response:

“Are Stable coins a threat to the Bitcoin ?
Short answer: no—stablecoins are not a fundamental threat to Bitcoin, but they do change how Bitcoin is used in the broader crypto ecosystem.
Here’s the clear breakdown.
________________________________________
1. Bitcoin and stablecoins solve different problems
Bitcoin
• Store of value (“digital gold”)
• Censorship-resistant, decentralized, fixed supply (21M)
• Optimized for long-term savings and settlement, not daily pricing stability
Stablecoins (USDT, USDC, PYUSD, etc.)
• Price stability (usually pegged to USD)
• Medium of exchange and unit of account
• Optimized for payments, trading, and liquidity
👉 Because they serve different economic roles, stablecoins don’t directly replace Bitcoin.
________________________________________
2. Stablecoins actually support Bitcoin demand
In practice, stablecoins:
• Are the primary on-ramps and off-ramps into Bitcoin
• Provide liquidity on exchanges for BTC trading
• Reduce friction for global users who can’t access USD banking easily
Most Bitcoin buying globally looks like:
Local currency → stablecoin → Bitcoin
Without stablecoins, Bitcoin adoption would be harder, not easier.
________________________________________
3. Where stablecoins do compete with Bitcoin
There is competition in one narrow area:
Medium of exchange
• Stablecoins are better for:
o Pricing goods
o Payroll
o Remittances where volatility is unacceptable
This means:
• Bitcoin is less likely to be used as everyday spending money
• But that trend already existed long before stablecoins
Bitcoin has largely won the “store of value” narrative, not payments.
________________________________________
4. Key difference: trust vs. sovereignty
This is where Bitcoin remains unique.
Stablecoins require trust
• Issuers can:
o Freeze funds
o Blacklist addresses
o Be regulated, seized, or shut down
• Backing depends on:
o Banks
o Treasuries
o Governments
Bitcoin does not
• No issuer
• No counterparty risk
• No permission required
• Works even if issuers, banks, or governments fail
In times of:
• Capital controls
• Sanctions
• Banking crises
• Sovereign debt stress
👉 Bitcoin demand increases, stablecoins become riskier.
________________________________________
5. Regulation may strengthen Bitcoin relative to stablecoins
Governments are increasingly:
• Regulating stablecoin issuers
• Requiring KYC, reserve disclosures, and compliance
• Potentially favoring bank-issued or CBDC-like stablecoins
This could make stablecoins:
• Less neutral
• Less global
• Less censorship-resistant
Bitcoin remains regulation-agnostic at the protocol level.
________________________________________
6. The likely long-term outcome
Instead of “stablecoins vs Bitcoin,” the future looks like:
• Stablecoins → money for spending, trading, payments
• Bitcoin → money for saving, settlement, and sovereignty
They are complementary, not adversarial.
________________________________________
Bottom line
Stablecoins are not a threat to Bitcoin’s core value proposition.
They may reduce Bitcoin’s use as daily cash, but they reinforce Bitcoin’s role as digital gold and monetary insurance.
If you want, I can also:
• Compare Bitcoin vs stablecoins in a financial crisis
• Explain what happens if a major stablecoin fails
• Analyze whether CBDCs are a bigger threat than stablecoins”

In two of my prior posts I showed the crypto market capitalization re-testing a bottom and then begin the turn north. That appears to be holding as a valuable entry point into this market.

Subsequent event:

The close I use is 7:00 PM EST. The market pulled back and we did not hold onto the new higher high. Be careful and watch the FED decision tomorrow on interest rates as it will cause a reaction. Closing above $3.325 trillion will set a new high for this cycle.

Below is a post with the heading “Economic Spin vs Reality” where I sought clarity on the trade deficit movements and offered my opinion on the topic. Today, the Kobeissi letter addressed trucking and captures the point I made.

Utilizing the past has proven to be wise. The phrase, history does not repeat itself but it often rhymes, is the basis of my understanding of investing. Two charts are before you:

1) Historic pattern of crypto market capitalization and movements from each four year halving is educational. The pattern is an important tool.
2) After a turbulent decline in crypto in the second half of 2025, the current move from a support point should not be ignored.

I read the below letter on “X” as posted by the Kobeissi Letter. I responded and have included my response at the bottom of this document.

The Kobeissi Letter
@KobeissiLetter

The US’ goods trade deficit narrowed +$18.6 billion, or +24%, in August, to -$59.6 billion, one of the largest monthly improvements this year. Imports declined -5%, to $340.4 billion, the 2nd-lowest since May 2024. This also marks the biggest drop in imports in 4 months. At the same time, exports rose slightly, to $280.8 billion, the highest since April. Since March 2025, the goods trade deficit has improved by +$76.8 billion, or +56%. Adjusted for inflation, the merchandise trade deficit narrowed to -$83.7 billion in August, the lowest since the end of 2023. Tariffs are reshaping the US trade.

My Response and evolving view of our future:

Why would you not add to this piece that advance ordering of foreign goods to get pre-tariff prices exploded the trade imbalance? AND now, ordering of foreign goods has fallen off a cliff because there is no need to order for tomorrow when you overstocked in advance of the tariff policy?
You should have been critical of the extreme variations from month-to-month. You should have noted that the economy is and will slow as the shipping, port, rail and trucking industries experience a forced recession.
Connect the dots.

At the moment, the Old World is in economic trouble.

We need an offset, and that is:

AI cannot come fast enough! It will feed the boom in technology investments that need to be made to service the data center demand, and then the renovation and growth in infrastructure investments (power), and then to every industry thereafter.

TJC

To view this in a larger print format, download the PDF and zoom into the PDF document.

Note: Material differences of % changes of price vs Mkt cap are signals to dig deeper into why the difference exists. One cause may be the issuance of more tokens which may restrain price changes even though the Market Cap moves higher.

Crypto Prices February 2024