But Nasdaq has been flat since last April. Even bitcoin is in the red.
Keeping your money in the bank means you are guaranteed to lose eight percent in purchasing power this year.
In a recession, it’s only the people who lose their jobs that get hurt.
In times of high inflation, everybody bleeds.
But crypto has the answer: interest on stablecoins.
Voyageur is offering 9% on USDC deposits.
They hate stablecoins. And they especially hate companies that offer yield on stablecoins.
They are doing everything they can to shut them down.
Just yesterday, Celsius put out the news that US investors won’t get yield on new deposits unless they are accredited investors:
Voyageur is under regulatory assault as well. From a March 30th press release:
People can use it to buy crypto, and transfer their crypto-tokens to other wallets, and most importantly, send their tokens to smart contracts which offer yield on their tokens.
No brokerage account required. Just you and your well-funded Metamask wallet.
So, let me summarize the situation:
Investors are desperate for yield on their assets. There is no yield to be found anywhere in the traditional financial markets and inflation is running at more than eight percent.
But you can find yield on stablecoins in the land of crypto. And there are companies in the traditional financial sector that offer the retail investor the opportunity to access that yield.
But those companies are under regulatory attack and access to those yield-bearing products is slowly being withdrawn from the market.
Okay, so how is the average retail investor reacting to the new regulations?
Looks to me like they are starting to bypass the traditional financial markets to access the yield-bearing assets directly in the public blockchain, by using tools such as Metamask.
How Is This Going to End?
This situation reminds me of the “Napster” wars in the early 2000s (although the stakes are much higher).
Filesharing just hit the internet and young people started to share their electronic music files through a program called Napster.
In the 2000s, everybody under the age of 25 (and then 30, and then 40…) stopped buying CDs.
How many retail investors under the age of 25 have a brokerage account, and how many of them have Metamask installed on their web browser?
Metamask is Napster. But they have much more money, and much better lawyers than Napster ever did.
How this ends is obvious. It’s just a question of time.