I’ve actually pulled out my top five charts relating to crypto and blockchain, which also show why arc believes that the crypto market will do a 25x in just seven years. And I think we’d all agree that a 25x in just seven years would be pretty sweet.

As always, if you do enjoy anything in the article, then drop a like, and a big thank you to everyone who does.

Okay first up chart number one shows the big trend shift away from credit and debit cards, and over to the new tool being used by consumers.

Number 1

And so starting with number one, this chart shows the big trend shift away from traditional financial products and over to the new and digital wallets. So firstly, this chart shows what’s going on with E-commerce. And this one is a POS point of sale.

So basically, in store, and we’ve got digital wallets, we’ve got the traditional products like credit cards and debit cards, and then just using cash. And this goes from 2016 to 2021.

So first looking at E commerce what’s going on online? Well, we can see not many people use cash and cash is slowly falling away. Interestingly, credit cards, which used to be a very secure way to pay online has been coming down as well. Debit cards are pretty low and quite flat. But it’s digital wallets that are really taking off the tipping point was in 2017. And now almost half of all e commerce transactions are being used by digital wallets and when it comes to in store.

So obviously in store cash has been king for many, many years. And it was leading the way all the way to 2020. But the trend is obviously down. Debit cards have been coming down credit cards in store around 20%. But it is increasing, but again is the digital wallet going from just over 15%. Now, almost 30%. So it’s doubled in the last few years.

So basically, cash is dying out. Traditional products are shrinking, and it’s the new digital wallet that is taking off.

Number 2

And this chart clearly shows the biggest benefit with digital wallets. And why this is happening. And quite simply, anyone in crypto knows that it eliminates the middlemen.

Now if you didn’t know, when you do buy something with a debit or credit card, they’ll call it an open loop system, which basically involves nine different people, you’ve got the issuer and card networks, the actual payment system provider, the acquirer and the seller, and it can take seven to 14 days for your money to actually settle.

And there’s lots of people taking fees, estimated fees being about 2.6. Now when you times this by millions and millions and millions of pounds, there’s a lot of people taking a cut. And with web three, and this new digital wallet, you can see it’s now just three people, one being the buyer, one being the seller, and then the digital wallet being the most direct way. And now you can see the fees are an absolute minimum going to be saving 2.4% of the 2.6.

So obviously digital wallets are the way to go. But incumbents like JP Morgan are going to fight this tooth and nail because they’re going to be losing an awful lot of money.

Number 3

This just highlights that there’s been some major institutional adoption into the crypto market during this bear market. Now most people will know who Blackrock are but it’s the largest investment manager in the world.

And middle of last year, they partnered with Coinbase prime to provide institutional clients with direct access to crypto starting with Bitcoin, this new partnership opens the door to potentially trillions of dollars into this new asset class.

We had bank New York Mellon in October, launching a crypto asset custody platform, again, helping the institutional investors. And amazingly, this touches more than 20% of the world’s investable assets, which is just huge.

Now, Eagle Brook advisors had a partnership with arc so they could offer financial advisors access to crypto, and then the other one was fidelity. And end of the year, they officially launched retail Bitcoin and ether trading off their own platform.

So even in a big crash, we had some major institutions stepping into crypto.

Number 4

And this one, they make a very big claim. They say that their disruptive innovation platforms could be the majority of the global equity market barring 2030. So a very big claim.

So ARK focus on five innovation platform. They’re now calling crypto public blockchains, which is interesting. You’ve got multi omics sequencing, robotics, energy storage and AI.

And they’re saying by 2030, most of the global stock market will make up these platforms. This is the rate that they’re going to be compounding apps. So this is the CAGR the compound annual growth rate.

So basically, what it’s going to be compounding at each year, and they see robotics being the best compounding at 68%, then energy storage at 56. And then you’ve got your crypto at 50, then artificial intelligence, and then multi omics.

Now, just to give this some perspective, the s&p 500 over the last 50 years is approximately compounding at about 10%. And arguably the world’s greatest investor, Warren Buffett is well known for being able to consistently compound at 20%.

So using those as a benchmark, you can see they’re expecting very big things from these innovation platforms.

Number 5

And this brings us nicely on to number five, and the title of this article that they believe by 2030 Crypto assets, we’ll be doing a 25x going from the 1 trillion to around 25 trillion.

And they’re saying that crypto assets could rival and redefine the traditional asset classes. And here they show global real estate, which is almost 300 trillion, we’ve got global debt being a huge 120 3 trillion, the global empty money supply being about 100 global equities being about 100.

We know gold is around the 12 trillion and crypto as of right now is around the 1 trillion so great news for anyone holding crypto as clearly our cast still very bullish on this asset class.

Summary

So as you saw some big claims coming from arcs, big ideas, and here were my biggest takeaways.

There’s a big trend shift away from traditional financial products like credit and debit cards over to the new digital wallet. The obvious benefit to digital wallets is that it cuts out several middlemen which people like JP Morgan are fighting hard.

And this is probably why the CEO Jamie Dimon keeps calling Bitcoin a scam. There’s been some huge institutional adoption last year with Blackrock bn y Mellon and fidelity despite the major crash and finally the team at Ark Invest believe the crypto market will be compounding at a huge 50% per year meaning a 25x in just seven years.

Full report: ARK’s BIG IDEAS 2023