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MicroStrategy Cements Bitcoin ‘Whale’ Status, Dave Portnoy Makes an Exit, and Jim Cramer Warms Up to Digital Hedges

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While 2020 has brought forth a litany of world issues, it has also been quite kind to digital assets like Bitcoin.  We recently highlighted newfound interest in Bitcoin on August 13th, with examples ranging from service providers, hedge funds, and more.

One month later, are these new market entrants happy with their purchase? Will the trend continue?

MicroStrategy

The headliner in our previous look was undoubtedly MicroStrategy.  As the world’s largest intelligence firm, it made quite the splash, with a lump sum purchase of 21,454BTC – which equated to roughly $250M USD.

This, however, was not enough to satiate the forward-looking company, as it just purchased an additional 16,796BTC;  Bringing the company’s cumulative BTC holdings to 38,250 – roughly $425M USD.  MicroStrategy CEO, Michael Saylor, made the announcement via twitter, stating,

If the company’s first BTC purchase wasn’t enough of an endorsement, this increased exposure to the asset certainly is.

MicroStrategy, like most companies, experienced hardships due to the effects of COVID.  Perhaps coincidental, the company has experienced a significant uptick is share value since its first BTC purchase.  As a result, the company has seen its shares attain similar value to pre-COVID.

Dave Portnoy

While MicroStrategy continues to be enamoured with BTC and what the asset has to offer, not all investors have developed this type of affinity.  Of our recently covered market entrants, Dave Portnoy stands out as having a bad experience.

Mere weeks after making a high-profile entrance into crypto markets, Dave Portnoy has indicated, via twitter, that he has exited crypto to complete further market research.

This move was attributed to a decision to purchase Chainlink – a purchase which turned out to be ill-timed, as the asset crashed in the following days.

Jim Cramer

Now that we’ve taken a brief look at each, a positive and negative experience, by recent market entrants, are others still fearful of the asset?

Respected investor and host of ‘Mad Money’, Jim Cramer, has warmed up to Bitcoin, becoming the latest high-profile name to enter the world of digital assets.  He recently let his evolving views of Bitcoin be known on a podcast with Anthony Pompliano.

 

Like many, Jim Cramer has listed fear of inflation as the main reason for attaining Bitcoin.  While still an ambassador for gold, he now views Bitcoin as another valid hedge, albeit with more potential upside.

Interestingly, Jim Cramer notes that part of his reasoning for becoming more accepting of Bitcoin is his children.  He has recognized that while wealthy/older investors today are still interested in safe-haven assets like gold, this will not be the case for the next few generations, as they grow up in an increasingly digital world.  He likens this old-school affinity towards gold as ‘using a typewriter’ in a modern world.  Overall, he states, on various occasions, that he ‘needs to do this for his kids’.  This is a refreshing attitude and approach, as many focus on the present and how to make themselves wealthy (at the expense of future generations).

While he will not be making a splash to the same extent as MicroStrategy, Jim Cramer has indicated that he will be allocating roughly 1% of his portfolio for exposure to Bitcoin.

Building a Hedge

Although each investor’s intentions may vary, there is one clear motivating factor behind the majority of these new market entrants – hedging.  With the world continuing down a path of economic uncertainty, investors worldwide have been flocking to safe-haven assets, such as gold.  With continued adoption of BTC, and the development of industry services, the once nascent asset is quickly turning into a legitimate and respectable store of value;  A store of value that many believe will one day rival gold and similar precious metals.

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Digital Assets

Kraken Becomes First US Licensed Digital Asset Bank

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Kraken Becomes First US Licensed Digital Asset Bank

Popular digital asset exchange, Kraken, has been given the green light to form a ‘Special Purpose Depository Institution (SPDI)’.  This designation will allow for Kraken to develop a new entity, known as Kraken Financial, which will act as a chartered bank offering comprehensive digital asset services such as deposit-taking, custody, and fiduciary services.

“Kraken’s vision is to become the world’s trusted bridge between the crypto economy of the future and today’s existing financial ecosystem.”

Kraken is the first company specializing in digital assets to receive the SPDI status – a particularly noteworthy step forward for Kraken and the blockchain industry as a whole.

Becoming a Bank

By becoming the first bank of its kind in the US, Kraken Financial is expected to play an important role in continuing the adoption of digital assets.  Some other benefits include:

  • Kraken Financial gains a first-mover advantage being the first entity of its kind
  • Blockchain as a whole will benefit through increased clout, adoption, and prevalence
  • The public will benefit through increased access to financial services built for the future

The forward-thinking nature of Wyoming regulators has not gone unnoticed by those responsible for Kraken services.  While many States have taken a more cautious approach towards the adoption of cryptocurrencies, Wyoming appears primed to blaze a trail forward through its treatment of FinTech.

“We’re thrilled to work in a state so aligned with our philosophy and values.  Wyoming is a rare and shining example of how thoughtful regulation can drive innovation for FinTech companies.” – David Kinitsky, CEO of Kraken Financial

When Kraken Financial first launches, services will be restricted to U.S. based clientele only.  The company notes that accessibility will expand over time to include international clients.

New Services?

The hard work that Kraken put into achieving this goal was not simply for the title.  By becoming a chartered bank, it will now legally be able to offer a variety of new services; each of which will help the company achieve its end goal of bridging traditional finance with the world of blockchain and cryptocurrencies.  The following are just a few of the services to be supported over time.

  • Custodial Services
  • FIAT Payment gateways
  • Account Management Services

“From paying bills and receiving salaries in cryptocurrency to incorporating digital assets into investment and trading portfolios, Kraken Financial will enable Kraken clients in the U.S. to bank seamlessly between digital assets and national currencies.”

New Assets?

Along with offering new services, Kraken will also gain the ability to support a wider range of asset classes.  Until now, the company has dealt primarily with cryptocurrencies.  Moving forward, however, Kraken notes that the possibility remains for securities to be supported.  With company roots surrounding digital assets, it would stand to reason that support for securities would include digital securities/security tokens, as well.

New Restrictions

While the aforementioned expansion of supported assets and offered services is a definite positive for Kraken, its new designation as a bank also comes with increased regulatory scrutiny.

In addition to now being subject to all the same rules as a traditional bank, it is noted that it will be required to maintain 100% of deposit reserves at all times.  This means that the bank will not be taking part in fractional reserve lending – providing its clients with full access to their funds at all times.

Kraken Financial

Founded in 2020, Kraken Financial is headquartered in Cheyenne, Wyoming.    This subsidiary of Kraken will function as a chartered bank, offering a variety of services, tailor-built to bridge traditional finance with blockchain-based assets.

CEO, Dave Kinitsky, currently oversees company operations.

In Other News

Kraken has always been a leader in the world of blockchain.  Not only is the company a vocal proponent for digital assets, but it has also taken various past actions to forward the sector.  We covered one such instance, as Kraken was a founding member of the ‘Crypto Ratings Council (CRC)’.

The CRC is a self-regulated group – comprised of industry leaders like Coinbase, Circle, Bittrex, and Kraken – which has tasked itself with educating the public on asset classification.  To learn more about what the CRC does, and how they do it, make sure to peruse our previous coverage, HERE.

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Digital Assets

‘Crypto Open Patent Alliance’ Created to Catalyze Blockchain Innovation

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Development of blockchain is moving at a quick pace.  It could, however, be quicker.  In order to spur increased adoption and development of blockchain based services, a new group known as the ‘Crypto Open Patent Alliance (COPA)’ has been formed.

This alliance, which is being championed by Square, essentially represents a group of forward thinking companies, which have decided to share blockchain related patents openly and freely.

Patents

In basically every industry, patents play a vital role.  Simply put, a patent is a right to exclusivity over a process or intellectual property (IP).  Patents are important, primarily for one reason – they protect from theft.

If a visionary inventor were to spend years painstakingly developing a new process or item, but neglected to protect the IP with a patent, a company could simply come along, and use the inventor’s IP to mimic the end product.  If the inventor is to be rewarded for their efforts, this IP needs protecting.

Sharing is Caring

Now that we have established what a patent is, and why they are important, is there a downside to them? Yes.

Often, companies with deep pockets will seek out ownership of patents surrounding competing technologies.  In this case, the company is not protecting the IP, but rather ‘putting it on ice’ and preventing others from using it.  This is a fairly common practice, with a plethora of examples by big corporations ‘patent hoarding’.

It is due to this mindset that the COPA was recently created.  In the eyes of the COPA, ‘sharing is caring’.  With the blockchain industry in such a nascent stage, growth and development can easily be stymied by patent hoarding.  If the industry is to meet the lofty expectations of many, it will require the sharing of knowledge.

The concept of patent sharing is not a new one.  While most companies are solely focused on each’s own success, there have been many examples over the years proving otherwise.  In these cases, motivation may range from doing what is right for the public, to developing an industry.  In the latter case, the mindset is that it is often better to be a small fish in a big pond, rather than a big fish in a small pond.

'Crypto Open Patent Alliance' Created to Catalyze Blockchain Innovation

One of the most well-known examples of patent sharing came 57 years ago, from Volvo.  After developing the three-point seatbelt, which is used in just about every modern car around the world, Volvo opted to share its patent.

While the company could have simply kept it to themselves, or licenced it out to rivals, Volvo opted not to.  This was done, as the company viewed the IP behind the three-point seat belt as more than a money-maker.  Rather, it felt a responsibility to the public at large to share its life-saving device.  To date, literally millions of lives have been saved by the decision to selflessly share this IP.

Volvo is also a noteworthy adopter of blockchain, as the company has recently announced its intent to use the technology as a means of monitoring Cobalt supply chains.  This is an increasingly important issue, as advent of electric vehicles has put Cobalt in high demand.  Unfortunately, much of the world’s Cobalt is mined in unethical conditions – something Volvo is looking to put a stop to.

Hoarders

In the past few years, there are various examples of patent hoarding occurring within blockchain.  The following are a few companies often associated with the practice.

  • Alibaba <210 patents
  • Coinplug <100 patents
  • IBM <130 patents
  • Bank of America <80 patents

It should be noted that the process of ‘hoarding’ patents does not necessarily imply bad acting.  In many situations, it simply means that the company being awarded a patent is a true innovator, constantly developing new technologies.

Square Backed

Ideas like the COPA may be appealing on paper, but run the risk of suffering from adoption.  To give something away for free requires a forward thinking mind.  Often, such alliances rely upon a snowball effect as people will only join once others take the leap first.

This should not be an issue with the COPA.  As previously alluded to, payment processing giant, Square, has announced its participation.


Jack Dorsey is one of the most well-known, pro-bitcoin figures around the world.  As the CEO of Square, it shouldn’t come as a surprise that COPA was found appealing.

Blockchain and Patents

With blockchain becoming one of the hottest technologies over the past few years, companies have been scrambling to create patents surrounding its use.  One company has taken a different approach, though.

Rather than focusing on being awarded blockchain patents, IPWe have decided to develop a blockchain based patent aggregation platform;  The goal of which is to bring new efficiencies to the patent industry, which is largely segregated and piece-meal on a global scale.

In Other News

For those interested in learning more about what a blockchain based patent may look like, make sure to check out our past coverage HERE.  In this example, we take a look at a recently awarded patent – surrounding digital securities – to none other than Square.

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Digital Assets

MountX Real Estate Capital to Tokenize 15+ Properties in Licensing Deal with Vertalo Real Estate (VRE)

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MountX Real Estate Capital will be utilizing the Vertalo Real Estate (VRE) platform to tokenize 15 properties over the coming year.  Founded in 2019, MountX Real Estate Capital is headquartered in Mexico City.  This young company offers Latin investors the ability to invest in a variety of Canadian real estate opportunities.

Real estate tokenization continues to be one of the dominant industries in the digital security space.  Real estate is perceived as a relatively easy and safe asset class to tokenize.  This is exactly the sentiment MountX is offering to its investors, facilitating the ability for Mexicans to invest in ‘safe’ real estate market of Canada.

Foreign Real Estate

MountX licensing the VRE platform from Vertalo, represents a unique opportunity due to the cross-border nature of the deal.  MountX is a gateway to ‘safe’ Canadian investment opportunities, that under normal circumstances, many would not have had access to.

MountX is involved in multiple cross-border investment opportunities, with three currently active on its site.  This makes it a company that is aware of the complexities surrounding foreign real estate investments.  These complexities are noted by MountX CEO, Enrique Suarez, when commenting on the choice to turn to tokenization.

“We are very excited to partner with Dave and the Vertalo team to launch our platform. We share the same vision of simplifying complex transactions with great technology, backed with robust security and transparency. This partnership enables us to empower people to become global real estate investors, in a simple, secure and exponential way.”

Vertalo Real Estate (VRE)

For those unfamiliar with VRE, we first detailed its launch in mid-2020.  The launch of VRE marked a concerted effort by a leading company in the digital securities sector to focus on a specific asset class.  Vertalo offers a suite of services that benefit all digital securities, with the VRE division focusing solely on real estate.

Vertalo CEO, Dave Hendricks has touched on this point, commenting,

“…Vertalo’s VRE was conceived and launched to help increase access to the best real estate investment opportunities, powered by simple-to-use technology, and designed for teams like MountX. The Vertalo VRE team looks forward to helping MountX execute against its vision.”

The VRE branch of Vertalo was created specifically with deals like this in mind.  It is a promising sign that mere weeks after launch, a licensing agreement with MountX Real Estate Capital was able to be achieved.

Past Deals

Vertalo has been at the center of various high-profile developments throughout 2020.  As a result, it remains firmly atop a select crop of companies vying to be industry leaders.

While real estate may be a perfect asset class to benefit from tokenization, it is by no means the only asset class to benefit from tokenization.  The recent partnership between Vertalo and DealBox which will see the companies tokenize 22 different projects in a variety of different industries.

Of these anticipated 22 projects, at least 8 have already begun the process, including,

 

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