Digital Assets and Blockchain: The Impact on Capital Markets, Entrepreneurship, Fundraising, and the Democratization of Investing
As we close out 2020, digital assets and the blockchain industry are experiencing another revival. The tokenization of assets and blockchain technology in general are having significant effects on capital markets, entrepreneurship, and fundraising by improving liquidity and democratizing investment opportunities.
Blockchain has the potential to prove that it can be a mechanism for democratizing data and providing access to stakeholders, partners, and end-users around the world. Blockchain applications range from tracking global supply chain management processes to tracking the impact of specific products or raw materials to enabling the development and support of the United Nation’s Sustainable Development Goals. Specifically, by facilitating the use of cross border capital transactions and enabling fractional investing, financial inclusion is made possible for the +2 billion adults around the world living without bank accounts.
Mainstream firms are starting to enter the cryptocurrency market. For example, Massachusetts Mutual Life Insurance Co. just purchased $100 million in Bitcoin for its general investment fund. As of mid-December, Bitcoin’s price broke $24,000 (later settling around $23,700) to set a new all-time high. Its current market capitalization has remained in the $455 billion range, making it the largest cryptocurrency. For frame of reference, JPMorgan (the largest global bank) currently has a market capitalization of $355 billion.
Even with the recent market rally, many potential market participants are still concerned with bad actor activity and are waiting for institutional grade infrastructure and the right safeguards (including regulatory approval) to move forward. Historical instances of corruption and money laundering have delayed mass adoption and progress.
INX Limited, a fully regulated digital assets trading platform, has emerged to bridge the gap. The firm is currently conducting the first Securities and Exchange Commission Registered (F1) Security Token IPO in US history for the development of its cryptocurrency, security token, and derivatives trading platform. INX Limited aims to enable the listing and trading of both regulated security tokens and cryptocurrencies for institutional and retail investors. This offering will be the first security token to IPO on the blockchain. The firm is fundraising directly from the public without a middleman. The offering price is the same for institutions, family offices, accredited investors and retail investors which is essentially democratizing early-stage investment and inventing security tokens for everyone.