Why Circle Stock is EXPLODING || Major Stablecoin SHIFT (Explosive)

Um, people don't realize this often, but

when you go pay for something in

e-commerce, you know, you're the

merchant does what's called an

authorization on your card, but they

don't actually capture the funds until

they reserve the inventory and they

calculate taxes. They have to figure out

shipping. And so, credit cards have this

kind of off capture, void, refund, uh,

functionality. And with Shopify and and

Coinbase, we actually were able to

replicate that in a smart contract on

chain. It's open source. Um, and so

people have been talking about the

programmable money that crypto can bring

for years. Yeah. And it's now finally

ready. Yeah. Okay. Okay. Okay. That's a

big deal. So why are companies like Visa

and uh, you know, Mastercard falling

today? Well, it's heavily because of

what we're seeing about this talk that

stable coins could actually be uh a a

medium of exchange for credit card

processors where you basically cut out

the likes of a Visa or a Mastercard or

otherwise. I think that's why you have

American Express partnering with uh uh

with Coinbase because they're like crap,

this could be the future. Let me be

clear about this, okay? Uh you might not

know about this but I I know a thing or

two about the broker dealer world and

and and how like transactions are

conducted with shares. So to overly

simplify this really quickly, if one if

you go buy shares uh on the open market,

you're really buying, you know, somebody

else's inventory basically. It could be

a market maker, it could be somebody

else's, but it's likely going to be a

different broker dealer, right? So your

shares, you want to buy a 100 shares of

Tesla. Okay? So, you take your cash and

you buy a 100 shares of Tesla. Your cash

goes over here. The shares come over

here. Well, that doesn't happen

immediately. There's the now a 1-day

settlement time frame. It used to be 2

days. But the problem is what happens if

the shares don't show up or the cash

doesn't show up. There's a whole

reconciliation process that goes on.

It's extremely expensive. It's extremely

hard with accounting. I'm uh you know I

got my uh uh series 27 which is a FINOP

a financial you know operator for a

broker dealer and it's all about fails

to deliver and and basically this

process it's an extremely complicated

accounting process that is massively

expensive. It is the worst part about

running a broker dealer because it is

ridiculously

risky, massive liabilities and there are

mandatory time frames for if you don't

get the cash or the shares that the

broker dealer has to all do all these

compliance operations with or whatever

else. Okay, it's kind of like the credit

card industry where when you swipe your

credit card, you have an intermediary

like a Visa or Mastercard or whatever

who's kind of sitting in the middle of

you and the merchant making sure that

the merchant gets the money but also

making sure that you have dispute

protections and credit card protections

while also, you know, everybody gets a

fee. Sometimes the merchant gets a

kickback. Sometimes the payment

processor like the payment rail that's

in between uh the actual device like a

square or whatever gets paid some money

or a toast. Then of course Visa and

Mastercard want their interchange fees.

Uh and and then the bank also wants

fees. That's how banks also make money

is doing transactions, right? So

everybody takes a little piece of the

pie. The reason everybody takes a piece

of the pie is because there's so much

damn compliance involved in the lag that

it takes money to go from one place to

another. So, why would Visa, a stock

that's basically a blue chip that, you

know, is at all-time highs, that is, you

know, a massive company, uh, worth, you

know, $673 billion. It's worth more than

Netflix. Okay? Because they just print

money. Print print print money. Okay?

Why would these be falling on stable

coin reports? Well, because the Wall

Street Journal just issued a report that

uh uh large merchants, including Walmart

and Amazon, are evaluating how they

could use stable coins to bypass the

traditional fees of card-based systems.

Huge. Absolutely huge. In fact, house

hack itself has looked into how we can

use stable coins to more rapidly process

people's payments on their bonds. You

already know, like I'm not trying to

pitch this, okay? I'm just trying to set

this up so you understand it. We're

doing this convertible bond offering

where you get a 5% yield and then it

converts to stock as long as the value

goes up and you get all of the value of

the stock on the upside, right? And

because it's debt, you get preferred

liquidation rights if there's a

downside. So, you have downside

protection. This again, this is not a

pitch for Houseack, but I'll just say

really quick, read the disclosures at

house hack.com. Uh, you know, read the

offering circular and private placement

memorandum or whatever. It's open to

nonacredit investors and accredit

investors. Okay, fine. The point is the

process of issuing shares, having a

transfer agent hold those shares, and

then making the payments to people on a

monthly basis for their 5% yield is very

tedious because we're putting in a

information for people so they get their

direct deposit. We have to verify that.

We have to go back and forth and triple

verify it. It's a giant pain in the ass.

With a stable coin, the same address

that you invested in would just

automatically get your yield and there's

no dis there's no delay. It's

instantaneous, right? So, that's an

example of like how house could benefit

from stable coins. I explained how

broker dealers could benefit from stable

coins. I think I I set up how broker

dealers work today. Remember that delay

in your cash to shares for $100 this

way, that way, right? Pain in the ass.

If you use stable coins, instantaneous

broker dealer transactions, it would

plummet fees in the broker dealer world

and actually make the stock market more

liquid. Now, why is Visa collapsing?

Well, because this is really reasonable,

Walmart and Amazon exploring how to use

stable coins.

Amazing. As they should, it is so

freaking expensive. every time you swipe

your stupid card on Amazon, you know,

they're losing 2 and a half% or whatever

on every transaction, potentially up to

3%. This is why Amazon partnered with, I

think, Synchry Bank and Amazon, sorry,

Amazon partner with Synchry Bank and

Chase, I believe those two, to offer uh

Prime Cards so they could try to cut out

some of the middleman and capture some

of those fees, but then they're giving

5% cash back, right? So like, you know,

they're really just giving back what

they're saving to try to keep people in

the ecosystem.

But if you use stable coins, you could

you could bypass a whole lot of these

traditional fees. So this is why Visa is

down, Mastercard's down, American

Express is down, PayPal's down,

Synchrony Bank is down, Capital 1 is

down, FSER is down. And these stocks are

like at all-time highs, which makes

sense because again, they print money

and they don't really do that much. They

That's not Mastercard. They spent so

much money on on advertising

uh because they have so much money.

Yeah, Mastercard's down uh 6% as well.

Uh and then, you know, here's Visa down

6.9%. Incredible. Uh merchants have

tried for a long time to adopt payment

alternatives to get around card-based

systems dominated by Visa and

Mastercard. Duh. Where we see potential

for risk is that these initiatives could

put pressure on interchange e economics

over time. Uh, a stable coin transaction

is more likely to be faster and at a

lower cost 100%. Which could advantage

third party networks that have bilateral

agreements on interchange with

merchants. Notes that merchant

consortiums have tried payment

initiatives in the past without much

success or uh is likely to be a long

uphill battle blah blah blah blah blah.

Yes, it's been hard because there are

still so many like regul regulation is

still very behind especially when it

comes to like broker dealers or like you

know house hack securities. It like

there's still so much regulation that

today because of regulation where it is

you'd actually have to do both. You'd

have to do like traditional systems plus

the stable coin systems. So it it's not

feasible to do it yet, but the

technology of stable coins is coming.

And I have to say it totally makes sense

that one of the first places you're

going to see this innovation is in the

credit card issuers. Uh or or not

necessarily the issuers, the

interchangers, so the Mastercard and the

Visas. That's huge because there's so

much money. I mean, I think we're

talking about a trillion dollars of

market cap between these two. We are.

We're talking about almost $1.2 2

trillion of market cap in Mastercard and

Visa that stable coins could disrupt.

And who's a stable coin issuer that's up

today? Oh, look, Circle, a stable coin

issuer that's really well up today.

You're up, you know, 6%. I mean, you

just you just IPOed, right? Uh but um

the point here is that the future is

going to be great at cutting out so many

of these fees and circle is the USDC

stable coin issuer which is you know

potentially one of your absolute largest

uh uh stable coins uh you know next to

you know USDT

uh US anyway you get what I'm saying so

you know tetherbacked versus like uh US

treasuries people always get confused

with those acronyms but anyway way. This

is a big deal. Now, what does it mean

for crypto? Well, I I actually think

it's fantastic for crypto because it it

normalizes

uh crypto cryptography, I should say,

for transactions. Now, how does that

affect Bitcoin? Eh, probably not so much

because Bitcoin at this point is not so

much of a beneficiary of being a payment

rail. It's uh more it's seen as an

investment, a diversification tool. Some

people call it a hedge towards

inflation. Some people call it a hedge

towards currency risk like the dollar.

Some people call it digital gold.

Whatever your rationale is for investing

in Bitcoin, that so much doesn't matter

here. But what happens is if people

become familiar and comfortable with

stable coins, then they become

comfortable and familiar with wallets,

which potentially makes them more stable

or or comfortable and familiar with

cryptocurrency investments like Ethereum

and Bitcoin. So that's how you could

have sort of like that second order

effect that benefits underlying

investments that are, you know, on chain

basically. Uh, and it also makes me

interested in this sort of like, you

know, what what is this here? You've got

the um

uh what is this? Earn 4% back bitcoin.

This is not sponsored. Okay. Like I

really should have like a sponsorship in

this, but but I don't. Earn up to 4%

Bitcoin back on every purchase with the

new Coinbase One card. you know, they

don't say what the limit is as far as I

could see here uh on on that because it

says earn up to 4% on every purchase,

you know, and then they put the little

one thingy, but then when I go to the

little one thingy, it just says that

it's, you know, issued by America, you

know, uh American Express, not all

eligible transactions, uh or not all

transactions are eligible to earn

Bitcoin.

Coinbase may at its sole discretion

determine whether a transaction is

eligible or not, and they could even

like deny or claw back funds. Bitcoin

rewards can decline in value. The reward

program is subject to change. Uh and

they don't actually provide the full

reward program details here. I don't

know if they've formed them yet. Uh who

knows, may maybe they'll come out in the

future, but but it's interesting. But

like right now this is partnering with

American Express, but I think the

writing is on the wall for in the future

them not even to need American Express.

You know, you could just issue the

stupid plastic yourself. Uh and and

basically it just becomes a stable coin

transaction and the device at the

checkout terminal knows, oh, okay, we're

going to run this through American

Express or we're going to run this

through the stable coin network circle

USDC, right? I don't know. I'm

speculating on that. But it is

interesting because this this is a

gamecher and I would argue that it's one

to pay attention to. Now, am I going to

say, "Oh, go and short Visa. It's going

straight down." No. I think this kind of

stuff is going to take years. But yeah,

look, if I were an investor in Visa or

Mastercard, this would make me shake in

my boots a little bit for wanting to be

a long-term holder because I do think

that longer term innovation is going to

cut out all this bull crap fee stuff

because what does it ultimately do? What

happens when you cut out the middleman?

Ultimately, it makes goods and services

that you want to buy cheaper.

stuff that you spend money on like your

Starbucks coffee, your Lowe's purchase

because you bought a bunch of dirt with

your son and and rocks and you loaded up

your Cybertruck and you scratched the

crap out of your Cybertruck bed and now

you're crying because your Cybertruck

bed is scratched up like crazy because

you swiped your credit cards so much and

all those interchange fees. Like all the

things I spent money on would be cheaper

if it weren't for those interchange

fees, you know? But the good news is now

you look at your Cybert truck bed and

even though it's all scratched up

because of all the rocks you

transported, you're kind of like that's

all right. a real man has a scratched up

bed, you know. So then you start

rationalizing.

Anyway, that's my take on what's going

on with these credit card issuers. Why

not advertise these things that you told

us here? I feel like nobody else knows

about this. We'll we'll try a little

advertising and see how it goes.

Congratulations, man. You have done so

much. People love you. People look up to

you. Kevin Pra there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.