The digital asset class has grown into a $150 billion market. Enormous returns have been made in 2017. Despite hundreds of digital asset obituaries from the financial press, these asserts are here to say. Many smaller retail investors have taken advantage of this new opportunity, but the majority of sophisticated, professional investors are still on the sidelines.
That changes now.
CoinDesk is hosting the world’s first digital asset investor outlook event, Consensus: Invest, on Tuesday, November 28 at the New York Marriott Marquis. At the center of this asset class, Consensus: Invest brings 600+ professional investors, hedge funds, wealth managers, banks, and family offices together and offers attendees the chance to get connected with how to invest, store, trade and judge value in this new asset class.
Ultimately, attendees will walk away with a richer idea of where the digital asset market is headed in 2018.
Major speakers at the event include:
Michael Novogratz, formally at Fortress Investment Group and now CEO of Galaxy Investment Partners
Chamath Palihapitiya, CEO of Social Capital
Glenn Hutchins, Chairman & Co-Founder of North Island & Silver Lake
Joshua Brown, CEO, Ritholtz Wealth Management
Howard Lindzon, Founder & General Partner, Social Leverage
Perhaps the most powerful point he made was “this is not an Information Age but an Age of Networked Intelligence.”
Networked intelligence is alive, adaptive and always seeking new forms to in which to emerge. Today, networked intelligence is making itself known in the form of Initial Coin Offerings (ICOs). An ICO is a ( so far) unregulated means by which funds are raised for a new cryptocurrency venture. An ICO is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies. Cryptocurrency is still not mainstream and most people think of Bitcoin when they hear about cryptocurrency. In July 2017 there were over 900 cryptocurrencies available and that number is sure to grow exponentially.
The existentialist in my wants to establish a bit more context prior to moving forward. Let’s break down the etymology of currency:
currency. 1650s, “condition of flowing,” from Latin currens, present participle of currere “to run” (see current (adj.)); the sense of a flow or course extended 1699 (by John Locke) to “circulation of money.”
Currency = to flow! Ideas need momentum. Start-ups need momentum. The predominate funding models are full of regulation and bureaucracy that are the very antithesis of flow. I remember hearing Kiva’s Premal Shah talk about “codified lending” back in 2012 where people were given loans not by their credit score but by their social score. If peers supported the endeavor and expressed confidence — one could secure a Kiva loan. That was disruptive. ICOs are disruptive in a similar way. When individuals appreciate and support an endeavor, an idea, a cause — they can in fact participate in breathing economic vitality into that endeavor, idea or cause by purchasing allocated tokens for the designated compaign. In and ICO one doesn’t just affirm an an endeavor, idea or cause — one becomes an economic engine by way of token participation. The deployment and aggregation of participation happens at an unprecidented pace and even more importantly it is distributed. The reason I selected the spider web with dew as a header for this article is the way it expresses distribution.
The ICO landscape is gaining traction which also means it is soon to be regulated. To keep up with new emerging patterns in this “flow” the voices I encourage you to track include:
What makes me most excited about the ICO wave is what is possible for the unbanked. According to Kosta Peric, our current finacial system excludes 40% of the population. I would much rather that those who are gaining economic access for the first time to be introduced to a participatory model (ICO) vs. an extractive model (VC).
What makes me the most concerned about the ICO wave is the ways in which participation can be commoditized. David del Ser and I are on the same page — we need to ensure we create scenarios for both optimism and dystopia. Every system has unintended consequences. This is a good time for Foucault: you may know what you do and why you do it, you don’t know what what you do does. Justin Timberlake was in the movie In Time which was a dystopian movie about the value of incremental time, a person was valued by seconds. There is a fundamental desire to quantify every aspect of running a platform. Not everything that counts can be counted, and not everything that can be counted counts, classic Einstein. Even with new technology — we are not allowed to buffer the intangible. The quantifiable “awe” still aludes us and for that I am happy.
Just 5 weeks ago I wrote about Bitcoin surpassing the value of Gold, but after the failure of the Winklevii to get their Bitcoin-powered ETF approved by the SEC, many predicted XBT would slow and lose value. This week, as CNBC reported, demand stimulated through moves by Japan and Russia to legitimise the crypto-currency pushed its value up 8% in a single week.
It’s not just Bitcoin that is on fire, however, the entire blockchain-based world can’t do wrong at the moment. In the last week also, the team at Blockchain capital launched the first US-based Initial Coin Offering (ICO) to power their new venture fund based out of California. The $10m raise was expected to be open for many weeks, but was clearly oversubscribed as the complete allocation of alt-coins were invested in within just 6 hours
The need for Distributed Ledger Technologies and alternative treatments to currencies that are better aligned with the realities of a borderless world of commerce based on the IP layer, and with technologies designed to circumvent the friction of the old financial systems, are speeding up investments in blockchain applications. Satoshi has no idea what he started when he wrote on Bitcoin back in 2008.
For now the world of Blockchain and Bitcoin is set to continue to grow inexorably towards some sort of crescendo that puts it at odds with existing regulations and legacy payments rails and systems. If you’d like to know more about what is happening with Bitcoin, check out our Breaking Banks podcast from last month where Brock Pierce from Blockchain Capital talked about their upcoming ICO launch.