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55 sats \ 3 replies \ @freetx 6 Jun \ parent \ on: Circle is wildly overvalued Stacker_Stocks
You're right. Still in a collapsing fiat system a PE of 25 is considered "normal".
I'm sure some will try. The funny thing though is are traditional banks capitalized enough? They cant simply print money, they need actual funds to buy 1:1 Treasuries to back their virtual USD.
The most curious thing (and least talked about, IMO) about GENIUS act is we are moving back to full reserve banking.
I suspect the next shoe to drop is that Tether and USDC will compete for clients by giving them a share of their interest earnings (assuming they are earning ~4.5% on their treasuries).
Therefore, I think the way the game will shape up is USDC or Tether will sign "exclusives" with large retail banks and offer them say 2% for the customers they onboard. The retail banks, being broke, will go for the easy-no-work-free cash.....
The retail banks are basically turning into front-end websites and Tether/USDC will be the actual banks.
If they start to offer users a share in the yield it becomes a race to zero like brokerage fees and the entire business model becomes about AUM not profit. If they need volume to 5x now they definitely need it to 10x or more if they are sharing the yield. The more treasuries they hold the more risk. They are short term but even small changes in price at such a large market cap could put them at risk of the peg breaking.
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I'm actually surprised USDT hasn't started to domicile to the US yet and/or get listed as a public company.
Supposedly Cantor is their bank....so all their funds are already held by US custodian...so it should be pretty straight forward for them to at least create a Tether LLC somewhere and become a domestic company.
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I am sure they will have a US division at some point.
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