Asset Manager Eyeing Crypto’s Potential via Stablecoins
T. Rowe Price Portfolio Manager Dominic Rizzo highlights stablecoins as the most significant application for cryptocurrency, suggesting their benefits are attracting broader market interest during recent notable developments.
Speaking at the Exchange ETF conference on Tuesday, Rizzo, who leads the firm’s global technology equity strategy, described stablecoins as the “most obvious use case” for crypto, acknowledging their “big, big potential.” His comments seem relevant amidst a flurry of stablecoin news this past week.
Recent headlines include World Liberty Financial’s USD1 stablecoin, Fidelity exploring a potential launch, and Intercontinental Exchange revealing its exploration of using Circle’s USDC stablecoin and its tokenized fund USYC to develop products for clients just today.
“It’s important to be thoughtful about where it makes sense to use DeFi vs. TradFi,” stated Rizzo. He specifically mentioned currency conversion between the Pound and USD as a potentially low-value application where traditional financial infrastructure (“TradFi”) renders stablecoin use unnecessary.
“Pound to USD conversion — where you have bank accounts on either side of the pond — is actually a really cheap transaction, and probably not the best use case for stablecoins,” he noted. Rizzo suggested that stablecoins gain more utility facilitating transactions in countries with less established foreign exchange liquidity.
Furthermore, he emphasized stablecoins’ value in bridging traditional fiat currencies and crypto assets. While stablecoins are a key use case, Rizzo views crypto more broadly, classifying Bitcoin as a “productivity-enhancing technology.” He acknowledged Bitcoin’s susceptibility to bubbles but stated he holds some positions despite this risk.
Within Rizzo’s T. Rowe Price equity fund, crypto exposure is currently limited to publicly traded companies like Coinbase and Robinhood, as well as Bitcoin miners. He criticized MicroStrategy (MSTR) for trading at a premium to its Bitcoin holdings’ Net Asset Value (NAV) and pointed to insufficient differentiation among mining companies.
Rizzo declined to identify any specific private crypto companies he would consider investing in should a crypto Initial Public Offering (IPO) surge emerge. However, based on his conviction in stablecoins, analysts following him point towards Circle as a potential strategic fit for future investment considerations within this space.
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