Our Dollar 2.0 investment thesis is well intact. Just getting started, actually. And if you’ve been watching the crypto space lately, you’re aware that the stocks highlighted in our Dollar 2.0 research reports are selling at a nice discount right now.
First, some background.
Washington has a habit of passing laws with names that promise fireworks but paragraphs that deliver footnotes.
The Genius Act was treated exactly that way.
Back in July, the headlines flared for a day or two — “crypto regulation,” “stablecoin guardrails,” “transparency requirements” — then rolled off the news cycle like a wave that couldn’t be bothered to reach the shore. We called it a “seismic shift” in our Grey Swan Live! on June 26 with Ian King.
The market assumed it was just another attempt to corral digital assets with a longer leash.
But here’s the thing. The new law isn’t really about crypto. It is about creating, by statute, a brand-new class of mandatory buyers for U.S. government debt.
A backdoor strategy for the U.S. Treasury to finance its massive $38 trillion in national debt,
In the middle of 47 unremarkable pages sat the line almost no one noticed: every payment stablecoin must be backed 100%, on a strict one-to-one basis, by high-quality liquid assets, and that list was narrowed with surgical precision.
High-quality liquid assets in this case are: U.S. dollars. Deposits at regulated institutions. Short-term Treasuries. Treasury-backed repos.
And “similarly liquid assets,” but only if the Treasury Secretary allows it.
Not the Fed.
Not the banks.
The Treasury.
Issuers cannot rehypothecate reserves. They must file monthly public disclosures.
Their executives must certify those disclosures under potential criminal liability.
Stablecoin holders receive priority claims if an issuer collapses. And no one — absolutely no one — is allowed to pay interest on stablecoins.
These are the regulations the institutional world needs to get on board with the program.
As Shanaka Anslem Perera posted on X, the Genius Act is “the most elegant piece of debt-demand engineering in modern finance.”
When the law passed, stablecoins were a $200 billion market. Today, they’re $309 billion. That $109 billion jump, by law, had to be matched with purchases of short-term Treasuries.
Each new digital dollar minted anywhere in the world now requires the purchase of a U.S. Treasury bill. This isn’t monetary policy — it bypassed the Federal Reserve entirely. It is fiscal architecture masquerading as crypto regulation.
Treasury Secretary Bessent expects the sector to reach $3 trillion by 2030, about a tenfold increase. The Bank for International Settlements estimates that such growth will save Washington roughly $114 billion a year in borrowing costs.
Congress didn’t raise taxes, cut spending, or reform deficits. It simply built itself an automatic buyer.
The power shift was subtle, almost invisible: regulatory authority moved from the Federal Reserve to the Office of the Comptroller of the Currency — an agency that reports directly to the Treasury Secretary.
And then JPMorgan, particularly CEO Jamie Dimon, announced it now accepts bitcoin as collateral after a decade of sneering.
Banks aren’t reversing doctrine because they feel whimsical. The underlying power structure just changed.
The Macro Desks Smell the Shift
Wall Street’s macro traders — the rare few paid to notice the gravity beneath the headlines — are on track for their best year since the financial crisis.
Goldman, JPMorgan, Citi: collectively staring at $165 billion in fixed-income and macro revenue.
It isn’t magic. It’s the sound of a system rebalancing: central banks uncertain, tariffs shifting, deficits swelling, and a brand-new structural bid for Treasuries rising from the digital deep.
When macro desks thrive, it’s because tectonic plates under the economy are grinding louder than the news.
The Dollar’s Setup Looks… Combustible
Hedge funds are massively short the dollar again — just as the greenback drifts near the bottom of its range. This is usually the moment before something snaps.
For twenty years, the pattern has repeated: extreme short positioning → sudden dollar revival.
Funds crowd into the same trade, global liquidity wobbles, and the dollar becomes the life raft that only seems boring until you need it in the dark.
With growth cooling and funding markets tightening at the edges, the next lurch higher may already be on the launchpad.
A “Meh” Economy in Full Bloom
Retail sales data finally arrived after the shutdown delay — up just 0.2% in September. August gave us 0.6%. July a respectable 0.65%. But the autumn air has a chill.
Consumers are drifting. Not splurging on cars or clothes, but still buying furniture and personal-care goods. They’re not confident, but they’re not done yet either.
Retailers like Kohl’s, Best Buy, TJX, and even stalwart Walmart see this ambivalent American perfectly: anxious, but shopping anyway — just further down the shelves.
And then there’s the “K-shaped economy,” a phrase as irresistible to economists as sourdough making kits were to the pandemic.
The top 10% now accounts for almost half of all consumer spending. Everyone else is doing math on their phones before checking out.
Housing: Pull It, Relist It, Pretend It’s New
In September, sellers delisted homes at the highest rate in eight years — 5.5% vanished from Redfin’s marketplace, a 28% jump from last year.
When nearly 15% of homes are at risk of selling at a loss, dignity reasserts itself. People would rather pull the sign than accept the price.
Some do the familiar dance: delist, wait 48 hours, relist at a pretend-fresh price. Like washing the dishes before guests arrive, it solves nothing but feels better.
Mortgage rates and uncertainty are chewing through the 2020–2022 frenzy. Houses aren’t moving. Sellers don’t want to admit the party ended. Buyers know better.
Boomers Still Hold the Kingdom
Americans over 70 now control 39% of all household stock holdings and 32% of total wealth, amounting to $53 trillion. Fifteen years ago, that number was half as large.
Boomers rode the great bull market, the great housing boom, and the great decline of interest rates. They bought early, accumulated quietly, and now sit atop the highest concentration of elder wealth in American history.
For Millennials and Gen Z, the pathway is narrower: student debt, higher rents, pricier homes, thinner pensions, weaker ladders.
The Great Wealth Transfer is coming — $90 trillion in assets. But surveys show nearly half of Boomers plan to spend most of it themselves.
The young wait. The old hold. The economy balances on the fulcrum.
Meanwhile, Markets Pretend It’s Christmas
All three major indexes closed higher again yesterday — and are rising still for a 4th straight day today. The S&P up 1.5%, the Nasdaq up more than 2%.
Traders, briefly terrified last week that the Fed was finished cutting, now believe the opposite. The Fed Guv’s helped: Waller opened the door. Williams nudged it wider. Daly simply walked through.
Markets respond like Pavlov’s dogs: a rate cut bell rings, traders salivate.
Through the Investing Looking Glass
On November 26, 1864, Charles Lutwidge Dodgson handed little Alice Liddell a handwritten manuscript — Alice’s Adventures Under Ground. A story born on a picnic, polished in private, then published under a name the world now knows: Lewis Carroll.
It was the first great children’s book written simply to amuse — not to moralize. A portal into a world where logic bends, rules invert, and the familiar becomes absurd.
Modern investors might sympathize. Today’s markets feel like a wonderland with better data feeds.
Rates may fall — but borrowing costs may not. The economy weakens — yet consumers still spend. Crypto gets regulated — only for Treasury demand engineering to be slipped in beneath it. The dollar looks weak — yet is poised to roar.
We tumble down conceptual rabbit holes daily on the Dive with each new headline. The scenery shifts. The characters contradict themselves. The Queen declares, “First the verdict, then the trial!” and the S&P nods politely.
The challenge is not escaping Wonderland. It is remembering which parts are real. Happy Thanksgiving to all!
~Addison
P.S. We’ll be out for the next few days. Our kids are all back in the house. They conspired – by themselves in a group chat – to host a Thanksgiving feast.
We’ll get to see what culinary skills they’ve developed out there in the real world and together, for the first time in years, we’ll sit around the long table in the dining room. Here’s to your Thanksgiving being festive, too.
As you’re aware, we’ve arranged for a special broadcast of Tim Sykes’ unique, Nobel Prize-inspired, $7.7 million trading strategy for Grey Swan Live! tomorrow.
While this is a holiday-shortened trading week, we’ve arranged for a unique presentation with Tim Sykes on Thursday @ 2pm EST/11am PST during Grey Swan Live! Mr. Sykes will unveil a novel trading strategy we believe you may be interested in.
Tim Sykes is one of the top traders in the game today. We’ve been working with him in one capacity or another for over a decade.
Spoiler alert: Tim uses a proprietary indicator to identify stocks on Fridays that are poised to spike higher when markets reopen after a given weekend. As you’ll see, Tim’s unique strategy is well-suited for consideration during the holiday season.
Also, if you didn’t get a chance to view last week’s Grey Swan Live! with Ian King and Mark Jeftovic, we recommend you take the time this weekend to do so. During the Live! we covered and provided guidance on the Dollar 2.0 trades in your special report. It’s a must-watch.
If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.
