What is the investment potential of Circle?

- How is the Plasma project, which currently has stable income and is in the stablecoin payment sector?

The stablecoin payment sector has been very hot this past year, with many competitors participating in both the US stock market and the crypto market. Moreover, there will likely be more new competitors entering in the near future.

Although these companies have gained a certain first-mover advantage, so far, I don't see any project with a monopoly or at least a unique advantage.

I even wonder if this sector could be one of those that seems to have "giant monopolies" but ultimately doesn't allow anyone to make much profit, or if its business model is difficult to monopolize and hard to establish a good business model?

There are typical examples of this in traditional industries, the most obvious being the traditional automotive and aviation industries. These two industries are basically dominated by a few giants, but the profits of each giant are quite average. This is especially true for airlines, where few companies can sustain a comfortable life and earn substantial profits over the long term.

In contrast, the smartphone industry, despite also being filled with giants, allows Apple to thrive. Its shipment volume and market share are not the highest, but it comfortably earns substantial profits.

So regarding the stablecoin payment sector, I am currently just observing and cannot yet determine which project has particularly strong potential. It won't be too late to act once I can identify a company with a unique advantage in the future.

- I’m not even buying Ethereum right now, so I definitely won’t buy UNI. What should I buy now?

I’m not buying anything right now.

This state has lasted for almost half a year (the last time I bought something was earlier this year when Ethereum dropped below $2500). The reason for not buying anything in the past six months is simple—there's nothing I see worth buying. I feel that everything is expensive now: stocks, crypto, precious metals; I don’t see anything at a low price.

- The staking income for Ethereum is about 2.6% ~ 3.2%. Are you staking now?

Yes, I have a portion staked on Lido.

- If we could lead the second wave to 4750 on the 10th and then sell, that would be great.

I can't lead that. I mentioned in my articles long ago that this bull market is quite atypical, and I don't see any particularly good selling points. So I simply plan to hold onto the assets I have and wait for the next cycle.

- Is Alibaba's AI application currently the best? If we participate, should we buy Alibaba stock directly or buy Alibaba-related concept stocks?

I remember once during an online discussion, I mentioned that among domestic AI companies, I (at that time) was most optimistic about Alibaba and Douyin. I indeed bought Alibaba stock back then.

However, after observing for a while, I feel that Alibaba is not quite what I imagined, or it seems a bit different from the Alibaba when Jack Ma was around.

Although the current head of Alibaba AI is investing heavily in AI and has released several impressive open-source large models, I still feel that its current AI efforts seem more about hitting metrics, like completing tasks, and are more for the sake of AI itself, which doesn't feel quite right, so I sold my Alibaba shares.

Now, I neither own Alibaba stock nor its related concept stocks.

- What do you think of Circle?

My view on Circle, as a stablecoin issuer, is quite similar to my view on stablecoin payment companies.

Although it seems that this field is approaching a situation of near monopoly, with Circle being the dominant player among compliant companies, I have no confidence in its future profit potential.

Circle's business model is quite straightforward: after issuing stablecoins, it directly buys government bonds with the dollars it receives, and the yield from these bonds is its absolute main source of income.

This absolute main income depends on two factors: dollar reserves (principal) x bond yield.

The yield on US government bonds has long stabilized around 2% ~ 3%, so this factor can be considered a constant.

That leaves one variable: dollar reserves (principal), which is how many stablecoins it can issue. I currently cannot assess its future market potential in this regard. I'm unclear if there are substantial barriers or moats in terms of market expansion.

Furthermore, a portion of Circle's profits also needs to be shared with Coinbase, meaning its final net profit will be reduced by a portion.

Therefore, I am currently just observing this company and have never bought its stock, even though its price has dropped significantly from its highs.