What an amazing beginning to 2021 it has been for crypto and Iconic! Bitcoin and Ether shot up to new all-time-highs, seemingly weekly, ADA has become a top-3 crypto asset, Binance Smart Chain and its native Pancake Swap have gone supernova in transaction volume and so much more! While there have been many newsworthy items in the crypto space to begin 2020, I thought I would use this month’s Insider to highlight what I feel were the most important, as well as share the 3 biggest developments at Iconic in 2021. Buckle up everyone!
Top-3 newsworthy items in 2021 so far
- Coinbase files for an IPO
Coinbase, one of the largest crypto exchanges and companies in the world, has filed for a direct listing on the Nasdaq for a reported target valuation of $100 billion. This is a monumental moment not just for Coinbase, its shareholders and team, but a colossal signal to the world the crypto is here and is not going anywhere. Not only is Bitcoin being adopted by institutions and corporates, but now Wall Street and the global investment community is boldly stating they wish to have further exposure to the crypto environment through the companies building the supporting crypto infrastructure.
Mark my words, this will be far from the last crypto company to go public in 2021. While Coinbase may be the flagship, this year will be markedly dominated by crypto companies going public on traditional capital markets. With the markets as hot as they are, the timing could not be better for leading companies to go public, although I am admittedly bit disappointed Coinbase did not directly list their own equity token on themselves, but without updated regulations this was a pipedream.
Now, is Coinbase worth $100 billion? Based purely on fundamentals, I have my doubts, however, Tesla and its march to a $1 trillion market cap and the recent GameStop/Reddit saga have thrown fundamentals out the window. On that Tesla note…
- Elon goes all-in on Bitcoin
Following the diamond-handed conviction being displayed by Michael Saylor, who recently issued another MicroStrategy $1 billion convertible bond to buy more Bitcoin and is showing no signs of slowing down, Elon Musk, Tesla CEO and social media darling, used $1.5 billion of his balance sheet to purchase Bitcoin as a treasury reserve asset. With the looming threat of fiat inflation at the forefront of every treasurer’s mind, dozens, if not hundreds of corporates will soon follow suit. Saylor even published his playbook that facilitated MicroStrategy’s Bitcoin purchase, and over 6,000 executives from large corporates and SME’s attended a webinar of his to talk them through it. This is what adoption looks like.
I don’t want to focus on just Bitcoin for corporate treasuries though. Don’t get me wrong, this is a massive step forward, but this is merely a few groups getting their toes wet in crypto with Bitcoin. This makes sense given that the narrative of Bitcoin as a digital gold has found its niche, and the pending threat of inflation is a pain-point big enough to create a sense of urgency large enough to convince the likes of Michael Saylor, Jack Dorsey and Elon Musk. Just wait until corporates truly start to understand Bitcoin fully as the world’s hardest form of money. Its adoption is inevitable.
But that is just the beginning. Once enterprises get their feet wet to protect their cash positions with Bitcoin, they will inevitably begin to look at other leading altcoins with interest, such as Ethereum. As they explore different protocols, I suspect they will finally have their “AHA Moment” where they realize that the value drivers for these assets are completely different than Bitcoin and being a digital store of value. Further, they will realize these protocols can help optimize business processes within the operations and enhance the products and services they offer consumers. After they cry “Eureka”, the mad rush to purchase cryptocurrencies they will inevitably use will be on. Bitcoin in treasuries is just the beginning.
You see, traditional treasury management for corporates is more built around managing/hedging forex and other macroeconomic risks to ensure the enterprise maintains its purchasing power for ongoing operations. Michael Saylor flipped this model on its head a bit by purchasing billions in Bitcoin, but this was even all done to manage the looming risk of inflation in the west, which was never much of a macroeconomic threat before like it is today. Once enterprises realize they will inevitably be adopting crypto protocols, just like many financial institutions realized in 2020 they had to adopt Bitcoin in their portfolios, they may be forced to begin purchasing ETH and other leading alts they will one day build on to maintain their purchasing power on these networks for ongoing operational purchases. This is not too dissimilar to companies expanding into new countries and needing to hedge forex risk with local currencies through more traditional treasury management strategies. If 2020 was the year institutions adopted Bitcoin, 2021 will be the year enterprises adopt blockchain. Luckily, we know who is leading the way.
- Enterprise adoption of crypto and blockchain will be the theme of 2021
On Thursday, Feb. 25th, the Baseledger protocol white paper was released by Unibright and Provide Payments. I was lucky enough to co-host an AMA for the release of the white paper, where it was revealed that Baseledger would be the blockchain for the Baselining of enterprises. But what does this mean?
Well, Baseledger is “a public-permissioned, council-governed blockchain network that fulfills the major requirements of enterprise organizations for participating in Baseline-enabled processes”. Unfortunately, many protocols that exist today are not compliant from a GDPR and data privacy perspective or are too crypto native for enterprises to adopt (unpredictable costs due to volatility). Baseledger proposes to fix all these issues through a unified framework, leveraging Unibright’s already issued UBT token as the native currency for the Baseledger protocol that merely processes everything on the back end. From the enterprise’s perspective, everything is processed and invoiced in fiat through Provide. How cool is that?
Baseledger is being rolled out for Coke One North America (CONA), the North American bottling and supply chain arm of Coca-Cola. CONA announced their intentions to use the Baseline Protocol last year. Now, with the launch of Baseledger, I suspect they will be far from the last large enterprise to be Baselined by Unibright and Provide.
This year hasn’t just been a great start for crypto, but Iconic as well. Here are some of the key developments which may tease what our community can look forward to in the imminent future.
As many of you may already know, Cryptology Asset Group, a leading European investment company in crypto and blockchain-based business models, has been a supporter and investor in Iconic for many years. Founded by Christian Angermayer, Mike Novogratz and Joram Voelklein, Cryptology is publicly traded in Europe with its most recent Net Asset Value (NAV) from mid-February estimated to be over €550 million. Cryptology’s highly curated portfolio of companies not only includes Iconic but boasts crypto behemoth block.one and leading bitcoin mining hosting and HPC provider, Northern Data. Even within one week of me stepping into the role, Cryptology was already investing alongside Alan Howard in the Bottlepay’s $15 million seed round.
I am extremely excited to be stepping up from being the Head of Asset Management at Cryptology and into the CEO role. Cryptology’s founding investors and I have a shared vision of leveraging our current position to continue to invest into the most innovative crypto and blockchain-based business models, and we even have a mandate to explore leveraging Bitcoin and other leading crypto assets in our treasury strategy. Given the self-evident strategic overlap, this move helps propel Iconic to a new level, and I look forward to lead both companies forward and into a bright future.
- Registration and license granted for our Cayman vehicles
As with all regulation-related matters, there are unforeseen compliance obstacles and additional requirements that delay the process, especially in the asset management space. I am beyond ecstatic to say, however, that our US-based Iconic team has finally received its Cayman funds registration and we are now able to launch our planned funds! Currently, the team is hard at work securing the first investors and has even been working with our fund administrators to perform KYC/AML procedures on the first investor groups. I look forward to sharing news when the funds formally launch on the imminent horizon.
- The Iconic team is expanding
With the business growing and multiple investment vehicles on the verge of launch, it has become necessary to grow the Iconic family even further. As such, we have secured two new team members who will be joining the Iconic Funds family as soon as the offboarding period at their current firms are completed in Q2. Both have substantial experience in capital markets with a focus on ETP/ETF product development and distribution. I have no doubt they will help take Iconic Funds and its products to the next level. I am beyond excited to introduce them to you all in the near future.
I hope you are all staying healthy and your new year is off to a similar great start. I, for one, am ecstatic to see all the hard work the Iconic team has put in, and the patience exhibited by our community, pay off.
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