In the field of investment, a widely circulated view is to categorize investment opportunities into two types: one is the creation of “0 to 1,” aiming for a hundredfold return; the other is the “1 to 100” rise, which may also bring a hundredfold return.
For the cryptocurrency and blockchain industry that has developed to this day, the “from 0 to 1” hundredfold opportunities may have become increasingly scarce and difficult. In the past, early investments in Bitcoin and Ethereum indeed created such myths, and many Altcoins also achieved similar beneficial myths during certain periods.
But now, as the total market capitalization of the industry approaches the scale of 3-4 trillion USD, the era of wild growth has passed, and we should perhaps shift our focus to the investment logic of “from 1 to 100.”
This logic, widely validated in traditional stock markets, is known as buying the leaders, betting on the “stronger stays strong” principle. In the U.S., investors tend to purchase tech giants like Apple, Microsoft, and NVIDIA; in China, this means investing in industry leaders such as Moutai, CATL, and BYD. The market over the past decade has repeatedly confirmed the effectiveness of this strategy.
Applying the same thinking to the cryptocurrency industry, we cannot help but ask: In the centralized track of the crypto world, can the crypto industry give birth to companies with a trillion-dollar market value?
I subjectively feel that the answer is affirmative.
As the global compliance process led by the United States continues to improve, the investment value of centralized institutions is becoming increasingly prominent.
Based on the current market landscape and business models, I believe there are two core tracks and one emerging track that are most likely to give rise to such giants.
Track One: Stablecoin Issuers
Stablecoins are an essential financial infrastructure in the crypto world, with a clear business model and strong profitability. Issuers represented by Circle (USDC) and Tether (USDT) derive their profits mainly from:
- Reserve** Asset Returns****:** Invest the fiat assets (such as USD) pledged by users into low-risk assets like U.S. Treasury bonds to earn interest income.
- Transaction Fee: A certain percentage of the fee is charged during the purchase and redemption of stablecoins.
- Ecological Circulation Revenue: The revenue generated from other value-added services throughout the circulation process.
We can make a simple estimation: it is highly probable that the total market value of stablecoins will exceed 5 trillion USD within the next ten years. Assuming Circle occupies a 20% market share, that would be 1 trillion USD. If its overall profit margin can reach 2% (the yield on US Treasury bonds is about 4%, plus various fees, so 2% is a relatively conservative estimate), then its annual profit will reach 20 billion USD.
If the market grants it a P/E Ratio of 50 — considering the P/E Ratio levels of tech companies like Apple and Tesla, this is a reasonable expectation for a stablecoin leader that combines both financial and technological attributes — then Circle's valuation would reach 1 trillion USD.
Therefore, it is almost a certainty that companies in the stablecoin sector will reach a trillion market value.
Currently, USDC and USDT hold a clear leading position due to their strong network effects. Among them, Circle (USDC) has a clear equity structure, making it a distinct quality investment target.
The business of Tether (USDT) is relatively complex, with its value being distributed across multiple sectors such as exchanges and public chains, making the investment logic somewhat chaotic.
There is no doubt that USDT currently has more strength than USDC, but USDT just doesn't have a more stable investment target, whereas USDC has a certain stock. I don't know if USDT will concentrate all its profits on a specific target in the future, but if it does, that will be a very good target.
Track 2: Centralized Exchange
Exchanges are one of the most powerful “money printers” in the crypto industry, and their business model is equally clear and highly scalable.
- Core Business: Collect transaction fees from global users.
- Derivative Business: Lending, payment, asset issuance, etc., covering many functions of traditional commercial banks.
- Candidate Asset Analysis:
- Binance (: Undoubtedly the industry leader. However, its value is diluted by equity and platform token (BNB), and the valuation model is relatively complex. Nevertheless, if centralized exchanges can give rise to trillion-dollar giants, Binance is definitely a core candidate.
- Coinbase: The second in the industry (second in reputation, first in compliance, and not second in trading volume), but its biggest advantage is its high level of compliance, relying on the strong compliance system and capital market of the United States. It has clear publicly traded stocks available for investment, and its value will not be diluted by other tokens, making it a purer investment target.
Currently, Binance is not listed, and the financial data is mostly speculation from the community. According to widely circulated data, Binance's net profit in 2024 is expected to rise between 5 billion and 7 billion USD.
Coinbase has become more transparent, with profits reaching over $2.5 billion for the 2024 fiscal year.
(Note: All researched by chatgpt 5 pro)
The total market capitalization of the entire crypto circle is over 30 trillion USD (CMC data). Considering that stablecoins, stocks, and government bonds will be migrating to the chain on a large scale in the future, all of these can bring profits to exchanges. It doesn't seem difficult for the profits of exchanges to increase tenfold.
In addition, before 2022, prior to the collapse of FTX, the entire industry experienced a wave of mergers and acquisitions, especially Binance significantly enhanced its strength through acquisitions and investments. However, after the collapse of FTX, acquisitions in the entire industry entered a low period. I believe a new round of merger and acquisition cycles will definitely come, as this is an inherent drive of capitalism. The monopoly positions of leading platforms like Binance and Coinbase will further consolidate using acquisition as a weapon, and their market values are likely to be higher.
If Binance's annual profit can reach $50 billion in the future, it would only require a 20x price-to-earnings ratio, and its valuation would also reach $1 trillion. It doesn't seem like a difficult task. The only question is where the value will converge since Binance has both stocks and coins.
Relatively speaking, the stock coin is much clearer.
Potential Track Three: RWA (Real World Assets) Custody and Asset Management Companies
This is a more forward-looking track. Broadly speaking, stablecoins are the largest and most successful RWAs. In addition to stablecoins, custodianship and mapping of real-world assets such as U.S. Treasury bonds and global stocks on-chain is also a huge market.
The business model of such companies is similar to that of stablecoin issuers, primarily profiting by charging asset management fees, custody fees, and transaction fees.
Currently, there is no absolute leader in this field. However, we can imagine that traditional asset management giants like BlackRock or crypto-native institutions like Grayscale could potentially become leaders in this area in the future and challenge for a trillion-dollar market value.
However, the path in this field is still unclear and relatively distant from us. Mainly, I currently have no understanding of this area at all; I am a complete layman.
Conclusion
In conclusion, with the maturation and compliance of the cryptocurrency industry, the investment logic of “the strong getting stronger” is becoming increasingly important.
In the centralized arena, stablecoin issuers and top exchanges are most likely to grow into trillion-dollar super giants in the coming years, thanks to their clear business models, strong profitability, and huge market potential.
Making money from the rise of “1 to 100” may be a more reliable choice in the cryptocurrency space for the next 5 to 10 years.
