Gautam Chhugani

Grayscale secured a landmark win against the SEC last week. The ruling went beyond the GBTC conversion, but laid unambiguous principles for regulators to evaluate spot crypto ETF applications. We suspect the crypto ETF opportunity won't just stop at Bitcoin but will extend into multiple crypto assets... The market initially rallied on the Grayscale news with Bitcoin up 6%, but as the SEC delayed the first Bitcoin ETF decision, gave up all the gains. The existing crypto market remains a low liquidity market, with limited new capital entering the space. As a result, traders position around events and sell the good news. The lack of follow through in the market should not be interpreted as lack of progress towards a new capitalisation cycle. The strong showing in the courts (Ripple and Grayscale in 2 months), improved ETF chances and the progressive institutional interest, is in contrast to the retail led crypto cycles of the past. This is a cycle slower to take off, but is being laid on much stronger fundamental grounds of regulatory clarity and more strategic long-term players entering the space. Our complete take in our Digital Assets Memo … (For our subscribed/institutional clients only) bernsteinresearch.com/brweb/ViewRese…

We expect tokenised stablecoins to grow from $125B today to $2.8Tn market, led by regulated, onshore stablecoins, over the next 5 years. We expect regulated stablecoins growth to be driven by a more mainstream consumer platforms led market. We expect stablecoin issuers to be B2B partners for consumer & financial brands (commerce, social branded digital dollars, bank sponsored digital dollars). Integration with consumer platforms would lead to a growth flywheel for stablecoins to captive users and expand distribution beyond crypto native platforms. Stablecoin business models are extremely lucrative due to float income from treasury & money market holdings of stablecoin issuers. Going forward, we expect these revenues to be shared with their consumer partners, making co-branded stablecoins attractive for new platforms. Stablecoin regulation is making fast progress across U.S., EU, UK, and Asia. Stablecoin regulation enjoys more political support than crypto regulation, as it is seen as a global race for digital currencies. We expect Layer 2 chains (Arbitrum, Optimism, Base, Polygon are production ready) and faster blockchains (e.g Solana) to provide scalability & low transaction costs (8-10 bps transaction cost today moving to 1-2 bps ). We recently published a primer on stablecoins – bernsteinresearch.com/brweb/ViewRese… (Institutional clients only)

We are elated to have Balaji Srinivasan @balajis join (remote) as a keynote speaker at Bernstein’s Digital Asset Roundtable on April 13th in NYC. Balaji will be talking about ‘The Fiat crisis’. This is an exclusive in-person event for the institutional clients of Bernstein.

We recently published our diagnosis of the FTX debacle & the path ahead for the industry. The FTX story - the Lehman moment or more like Enron? (Institutional clients only) bernsteinresearch.com/brweb/ViewRese…

We published our monthly on-chain data deep-dive comparing leading public blockchains. (Bernstein Institutional clients only) bernsteinresearch.com/brweb/ViewRese…

We are elated to host @cz_binance (Founder/CEO, Binance) for a virtual fireside chat on September 13 (12 pm ET). Exclusive event for Institutional clients of Bernstein. Sign up here - bernstein.dealogic.com/clientportal/C…

Fat protocol thesis could evolve to fat application thesis. Post crypto crash, with blockspace supply > demand, successful applications are rare & could accrue value. See our report - 7 predictions to reignite crypto cycle (Institutional clients only) bernsteinresearch.com/brweb/ViewRese…

Ethereum is finally scaling. Layer 2 rollups are making Ethereum competitive again. In the last 45 days, user growth has inflected on Optimism & Arbitrum. You can read our Institutional investor’s guide to Ethereum - bernsteinresearch.com/brweb/ViewRese… (Institutional investors only)