I’ve been a trader and investor for 44 years. I left Wall Street long ago—-once I understood that their obsolete advice is designed to profit them, not you.
Today, my firm manages around $4.5 billion in ETFs, and I don’t answer to anybody. I tell the truth because trying to fool investors doesn’t help them, or me.
In Daily H.E.A.T. , I show you how to Hegde against disaster, find your Edge, exploit Asymmetric opportunities, and ride major Themes before Wall Street catches on.
Table of Contents
H.E.A.T.
Today we talk a about two major themes, stablecoins and tokenization
The Stablecoin Mirage—and the Coming Tokenization Boom
The promise of stablecoins has always sounded too good to be true: borderless payments, instant settlement, and a brand-new demand engine for U.S. Treasuries. They were supposed to be the digital glue that binds the future of finance together. Instead, what’s emerging is far more complicated—and far more revealing about where the real money will be made.
Let’s start with the reality. Stablecoins—dollar-backed digital tokens like USDT, USDC, and PYUSD—do serve a purpose in crypto markets. They make trading frictionless and provide a pseudo-dollar bridge where banking access is weak. But the idea that they’ll underpin the next global monetary system is fiction. Governments will never tolerate losing control of monetary policy to unregulated private issuers. Banks will never allow deposits to flee into instruments that directly compete with them. And foreign governments—especially China, the Gulf states, and parts of Europe—won’t sit still while dollar-denominated tokens expand Washington’s reach.
The global share of stablecoins that are dollar-backed is roughly 99%. That’s not innovation—it’s digital dollarization, and it’s already triggering pushback. Expect more countries to impose local restrictions, demand licensing frameworks, or build their own “regulated token” alternatives. Europe’s MiCA regime and Singapore’s Payment Services Act are early blueprints: stablecoins will be permitted only if fully collateralized and integrated into the banking system. The endgame looks a lot less like crypto anarchy and a lot more like digital finance 2.0, run by banks and payment processors.
The real story—the investable one—is tokenized deposits. These are not speculative assets or offshore money substitutes; they’re simply bank deposits represented as digital tokens on secure ledgers. They stay within the existing banking and regulatory perimeter but allow for 24/7 settlement, atomic swaps, and real-time risk management. Every major central bank pilot—from the Fed’s Regulated Liability Network (RLN) to the BIS’s Project Rosalind—points toward this hybrid future.
If you want to find the next generation of winners, follow the tokenization rails, not the stablecoin float.
Winners
Banks that digitize balance sheets: JPMorgan ($JPM) is already running JPM Coin for institutional settlement. Citi ($C) and HSBC are building tokenized deposit frameworks that will operate inside regulated networks. These will own the on-chain transaction layer.
Payment processors with compliance DNA: Visa ($V) and Mastercard ($MA) will survive stablecoin disruption precisely because they can integrate tokenized deposits into existing merchant systems while maintaining fraud protection, KYC, and arbitration. They’ll tokenize fiat, not replace it.
Blockchain infrastructure with real-world hooks: Avalanche ($AVAX), Polygon ($MATIC), and Ethereum ($ETH) will all benefit as tokenization rails expand. JPMorgan already uses Polygon for its Onyx network; Avalanche has struck deals with major banks for asset tokenization.
Custody and data networks: Coinbase ($COIN) has pivoted toward regulated token issuance and custody services. Fireblocks and Anchorage are private but strategically positioned.
Losers
Pure-play stablecoin issuers: Tether (private) and Circle (CRCL) will survive but face margin compression as regulators demand higher transparency, onshore reserves, and bank partnerships. Their spread income disappears when Treasuries fall or collateral rules tighten.
Crypto exchanges dependent on offshore stablecoins: Binance and Bybit’s dominance in stablecoin liquidity will erode as institutional tokenized rails emerge in regulated markets.
Money-market funds and smaller banks: Stablecoins already drain short-term funding. Tokenized deposits inside megabanks will accelerate the concentration of liquidity, leaving smaller banks funding-constrained.
The most important takeaway is this: the Fed won’t let stablecoins rewrite the dollar—but it will quietly copy their plumbing. What begins as tokenized deposits inside bank networks becomes the foundation for retail-facing tokenized accounts, cross-border wholesale settlement, and real-time programmable payments. That is the true monetary innovation of this cycle.
For investors, this transition will play out the way every financial revolution does—first chaos, then consolidation. Today’s stablecoin volatility is just noise. The long-term asymmetric trade is to back the institutions and infrastructure that will digitize trillions in real-world assets and liabilities.
Stablecoins may fade into regulatory containment. Tokenized deposits, however, will become the bloodstream of the new financial system. The difference between them is the difference between speculation and sovereignty—and that’s where the next decade’s alpha will be found.
What’s Moving Markets Today
Red yesterday and so far this morning. Markets are well off the lows after Trump said no when asked if high China tariffs will stand.
Watch the 50 day on the SPY as it looks like it wants to at least test it….
Once again gold looks to be the only thing up and crypto is getting crushed.
The most interesting thing to me this morning is regional banks. Long time readers know I’ve been negative on regional banks for a while, which is why I launched an inverse regional bank ETF. There are a lot of reasons for this, shaky loans are one of them. Zions and Western Alliance both disclosed that they were exposed to fraud by borrowers….
KRE does look like a short here as it moves below the 200 day moving average….
How Else I Can Help You Beat Wall Street at it’s Own Game
Inside H.E.A.T. is our monthly webinar series, sign up for this month’s webinar below….
Why Covered Call ETFs Suck-And What To Do Instead
Thursday October 23rd 2-3PM EST
Covered call ETFs are everywhere — and everyone thinks they’ve found a “safe” way to collect yield in a sideways market.
The truth?
Most of them suck.
They cap your upside, mislead investors with “yield” that’s really your own money coming back, and often trail just owning the stock by a mile.
Join me for a brutally honest breakdown of how these funds actually work — and what you should be doing instead.
What You’ll Learn:
🔥 Why “high yield” covered call ETFs are often just returning your own capital
📉 How most call-writing strategies quietly destroy compounding
🚫 Why owning covered calls in bull markets is like running a marathon in a weighted vest
💡 The simple structure that can fix these problems — and where the real daily income opportunities are hiding
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