MW What you need to know about stablecoins and stock tokens as Robinhood and Circle pop

By Philip van Doorn

Also: A look ahead as the S&P 500 returns to setting record highs; how to decide on a Roth IRA conversion; and more pointed advice from the Moneyist

It can be easy to form an opinion about a new technology or service without knowing very much about it. But recent events underscore the importance of learning about stablecoins and related technology.

Circle Internet Group Inc. $(CRCL.UK)$ developed the USDC stablecoin (USDCUSD), which is designed to be pegged to the U.S. dollar to facilitate trade and money transfers, and to be easily redeemable for dollars. Circle completed an initial public offering on June 5, and through Wednesday the stock had soared 474% from its $31 IPO price to close at $177.97.

Circle said on Tuesday that it had applied with the Office of the Comptroller of the Currency to establish the First National Digital Currency Bank, N.A. This would be a traditionally regulated depository institution, although its focus would be on overseeing the management and circulation of USDC stablecoins.

Read: Why Circle's proposed national stablecoin trust bank is a smart move

On Monday, Robinhood Markets Inc. (HOOD) rolled out new tokens through which European customers can invest in U.S. stocks and exchange-traded funds, and even companies such as SpaceX whose shares aren't directly traded on public exchanges. James Rogers explained why some analysts consider Robinhood now to be a "must-own" stock as an early play on blockchain-enabled investment services.

New uses and expanded availability for stablecoins and tokens will lead to new opportunities, but also new risks and regulatory scrutiny. In an article initially published by Project Syndicate, Yanis Varoufakis, the former finance minister of Greece, described many use cases for stablecoins and tokens - and a simple way for the U.S. government to prevent related financial meltdowns.

More: These stocks surged as SEC chair sounds upbeat on 'tokenization' of equities

Stock-market bulls and bears

The S&P 500 SPX closed at a record high on Wednesday (and again on Thursday). The U.S. large-cap benchmark index had returned 6.6% this year through Wednesday with dividends reinvested. That represented a sigh of relief when considering that through April 8, the index was down 15% for 2025.

To put the midyear return of 6.2% in perspective, consider that for 20 years through Wednesday, the S&P 500's average annual return, again with dividends reinvested, was 10.7% according to FactSet.

So what's in store for the stock market from here?

Joseph Adinolfi explained how a "golden cross" trading pattern indicated more gains ahead for the S&P 500.

Then again, analysts at BCA Research recommended investors lower their allocations to U.S. stocks for this reason.

Another bear case: Here is the new top risk for stocks and bonds in the second half of 2025

More from Joseph Adinolfi: Fourth of July holiday highlights four reasons 'American exceptionalism' isn't going anywhere

Playing it safer with a low-volatility bond ETF

Some investors and savers prefer to take as little risk as possible, putting their money in bank accounts or money-market funds to avoid the bond market's price fluctuations. But you might consider an ultrashort bond fund designed to have low volatility while providing more income. Laura Mayfield of Fort Washington Investment Advisors described her approach to co-managing the Touchstone Ultra Short Income ETF TUSI, which includes finding opportunities in an area of the bond market that might surprise you.

Another income angle: JPMorgan Chase, Goldman Sachs and others boost dividends - check out how they have rewarded their committed shareholders

Amazon's Prime Day(s)

This year's Amazon $(AMZN.UK)$ Prime Day will actually run from July 8 through July 11. Bill Peters explained why Prime Day has become more important than ever for Amazon.com Inc.'s shareholders.

The Moneyist didn't write this headline to be funny

Quentin Fottrell - aka the Moneyist - tackles serious questions from MarketWatch readers about all sorts of financial topics, including conflicts over money within families. Here are some of his stories from this week:

-- 'I do all the yardwork, cooking and cleaning': I live with my daughter and her lazy boyfriend. She wants me to buy her house. Do I say yes?

-- 'I'm single': At 70, I have $500,000 in stocks and $220,000 in savings. How do I invest my $130,000 windfall?

-- 'My whole financial world is upside down': I'm 'medically retired' at 51 with $428K in stocks. Is this enough to live on?

Estate planning: Why LGBTQ+ couples are racing to do estate planning right now: 'I don't know an LGBTQ person that isn't nervous

As you save and plan for retirement, you need to think about taxes

A traditional individual retirement account or an employer-sponsored account such as a 401(k) or 403(b) is funded with pretax money. This means you avoid paying income taxes on any money you contributed for that year. After that, any interest or dividends you earn, or capital gains you realize, will not be taxed until you begin to make withdrawals. The money you take out will all be fully taxable as regular income.

A Roth IRA, Roth 401(k) or Roth 403(b) is funded with after-tax income. This means that after the money goes in, it will never be taxed when you make withdrawals. And the interest, dividends you are paid or capital gains you realize within the retirement account will never be taxed either.

And you can convert a traditional retirement account in full or in part to a Roth account to "take your tax lumps early" if you choose to. But it isn't an easy decision to make.

Beth Pinsker writes the Fix My Portfolio column. This week, she explained various factors to consider when deciding whether or not to convert to a Roth IRA, and when to do it.

More from Beth Pinsker: Women are about to be tremendously wealthy. So why is it so hard to find good financial help?

Here is the next AI trend for investors to ride

Coverage in the financial media of the development of generative artificial-intelligence technology has focused on the hardware - especially Nvidia Corp.'s (NVDA) graphics processing units being installed by data centers.

But Laila Maidan explained why investors might want make a long-term AI play with a different group of companies, as Tony Kim, head of fundamental equities for BlackRock's global technology team, expects generative AI to push into most industry sectors.

What to stream this month

With so many streaming services available, and the ability to switch them out from month to month, it can pay to manage your subscriptions and trim them to save money. Which ones have the most compelling new offerings for you?

Mike Murphy broke down what's worth streaming in July on eight different services.

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-Philip van Doorn

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July 03, 2025 13:16 ET (17:16 GMT)

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