The Weekly Validation

Welcome to the first issue of The Weekly Validation.  This newsletter will bring you the most important news affecting the digital asset markets.We’ll answer the two most important questions:  What happened? And should you care?

📊 Markets This Week.  After months of sideways trading, crypto surged this week.

Bitcoin (BTC): $104,532.39 (+9.41%)

Ethereum (ETH): $2,514.85 (+37.26%)

Solana (SOL): $173.89 (+19.22%)

 Meta is reportedly in talks to enable blockchain-based stablecoin payments across Facebook/Instagram. 

🧠  Why You Care:

1. Mass Adoption:  Having native payments seamlessly built into the world’s most popular apps will drive adoption and use.

2. More Staking Revenue:  Stablecoin payments occur on a blockchain. Stakers (like Validator Digital), who power the network, get paid every time a transaction occurs.  More transactions = more staking revenue.

3. More Valuable ETH:  Assuming Meta builds on on Ethereum (likely an L2 of Ethereum), each transaction spends a tiny bit of ETH.  Collectively, that should burn (or remove) a significant amount of ETH from the ecosystem.  Decreased supply means increased price.

💡  Bonus Insight:

• Stablecoins are crypto’s killer app—cheap, instant, and already processing more volume than Visa (Q4 2024).

🔥 Hot Take:  Big development.  Still not a fan of Facebook.

Banks may now buy and sell digital assets for customers.  

❓ What happened: The Office of the Comptroller of the Currency (OCC) issued Interpretive Letter #1184, as part of a series of pro-crypto guidance that has been issued by numerous government agencies since the beginning of the Trump administration.

🧠  Why You Care:

1. Banks’ adoption is a prerequisite for digital assets being “easy to use”. Mainstream adoption is dependent, in my opinion, on digital assets being as easy to use as a traditional financial products.  Right now, they are not.  The OCC guidance gets us one step closer.  Imagine seeing your bitcoin or stablecoin balance right in your banking app.

💡  Bonus Insight:

• Legislation is key:  While the OCC guidance is important, two pieces of stablecoin legislation are critical.  The STABLE Act (House) and GENIUS Act (Senate) are making their way through congress now.  The naming is hilarious, sure.  The GENIUS act suffered a setback this week, as Democrats held up the bill. The Democrats tied this to an attempt to pass legislation to prevent sitting elected officials from profiting from launching financial products, like Trump’s memecoin.  Watchers believe the bill could move out of committee as early as next week.

• Banks are already capitalizing.  One such neo-bank that launched recently is Meow Technologies.  While the name is… let’s say memorable. The adoption among the e-commerce community has been impressive.    Why?  One reason, Stripe announced this week it enables stablecoin payouts for its customers in 101 countries.  Being able to immediately get paid in stablecoins, transfer that to a bank instantly, and have that settle in USD instantly, is a vast improvement over wires or ACH.

• Ethereum upgrade also improved usability.  Ethereum had the largest upgrade to date, with the release of Pectra.  One of its big changes is to improve the user experiencing of sending funds.  Between traditional players making it easier, and crypto-native experiences improving, I believe we’re moving much closer to a state where its just as easy to use digital assets in everyday transactions as it is using traditional financial products, like credit cards.

🔥 Hot Take:  Some banks, like Bank of America, have signaled an interest in moving fast.  I wont hold my breath.  I think the adotion of stablecoins will be a multi-year journey.  Paper checks aren’t quite dead yet.  It’s still early, but the total addressable market is massive.

 Coinbase releases the x402 Standard 

❓ What is x402: A payment protocol that enables instant stablecoin payments directly over HTTP. It allows APIs, apps, and AI agents to transact seamlessly, unlocking a faster, automated internet economy.

🧠 Why You Care:

1. Builder adoption: x402 will make facilitating digital payments on the internet significantly easier to build, and faster to process.  

2. AI:  The standard, and stablecoins, will allow for AIs to transact on the internet, according to predefined rules.

3. Micropayments: People, services, or devices can easily transact in micro-payments. Think, for example, of car insurance you pay for by-the-mile.  Music-royalties paid per stream, etc.

💡 Bonus Insight: 

• 404 Error for 402 - You may be familiar with a 404 “page not found” error.  This code has been in use since the 1990s.  The 402 code existed - conceptually - as an online payments protocol since then, but the technology to make them a reality has not existed until now.  Marc Andressen has referred to this absence as the internet’s “original sin”.

🔥 Hot Take: This standard is exciting.  Not only can existing businesses be more profitable, but this standard enables a whole category of new business models.

Thank you for reading this inaugural issue.  Is there something you want to see more of? I’d love your opinions.

Keep on validating.—Josh

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Nothing in this newsletter is financial advice or a solicitation to make an investment. Please do your own research and consult a professional before making investment decisions.

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