Twenty-two projects representing a cumulative $200M in digital securities. Those are the numbers of a new tokenization endeavour being undertaken by a pair of companies via Tezos.
DealBox and Vertalo have announced that they will be working together, with each contributing varying capabilities to the undertaking.
Vertalo is expected to handle tasks surrounding the issuance and management of the digital securities. DealBox will then utilize these as a means for providing access to capital for SMEs.
The digital securities, to be issued throughout this process, are expected to be based upon the Tezos blockchain. While the use of Tezos over the popular Ethereum may seem surprising at first, it becomes clear after looking closer at the benefits offered by the former. For example, Tezos utilizes POS, supports multiple programming languages, fast transaction rates, and more.
To learn more about why, exactly, Vertalo has chosen to rely upon Tezos, make sure to read the following article.
Interestingly, in their press release, Vertalo and DealBox take the time to highlight the timing of their announcement.
The SEC has recently proposed loosening restrictions surrounding various fund raising methods. If enacted, projects such as the ones discussed here today will benefit greatly.
It is import to remember, however, that these changes are simply a proposal, at this time. While Vertalo and DealBox may, indeed, have announced their partnership at an opportune time, it may also be subject to the status quo.
Upon announcing this new development, representatives from each, Vertalo and DealBox, took the time to comment.
John Nance, President and CIO at Deal Box, stated,
“At Deal Box, our mission is to help liberate entrepreneurs from the inefficiencies of traditional investment banking and capital formation and enable them with today’s best-in-class technologies to drive more efficient and effective results to help their companies grow. With the completion of our licensing agreement with Vertalo, we are doing just that, as we begin to issue digital securities across our platform using Vertalo’s systems and the Tezos blockchain. The Deal Box x Vertalo relationship furthers our ability to identify opportunities that advance our collective ecosystem as we all work to simplify and advance this industry.”
Dave Hendricks, CEO of Vertalo, stated,
“Vertalo is excited to provide Deal Box and its dozens of issuer clients with the most comprehensive and compliant platform for the issuance and management of digital asset offerings. The Deal Box team represents the future of the digital asset ecosystem: smart capital advisors that are assisting their portfolio companies with fundraising and investor relations functions at lower cost and with greater simplicity. Vertalo is eager to empower and support Deal Box with the platform tools, technologies, and techniques that enable them to go to market with their own white-labeled security token issuance solution, backed by the support of a team with extensive capital markets experience that has been involved in regulated digital assets since 2017.”
Some partnerships come and go, as good intent doesn’t necessarily result in a fruitful relationship. It would appear as though DealBox and Vertalo have managed to avoid this, however, and successfully found a way to work together.
This has been made evident through various dealings between the two companies in recent months. For instance, the 22 new securities to be tokenized, discussed here today, simply represent another round. As such, this would indicate that each company was pleased with the first round of companies tokenized, enticing them to work together again.
One such example of past dealings is that of Zapaygo and their STO.
Founded in 2016, DealBox operates out of California. Above all, DealBox facilitates capital formation for promising start-ups. DealBox also offers ancillary services, which include consulting, investment packaging, and more.
President, John Nance, currently oversees company operations.
Founded in 2017, Vertalo operates out of Austin, Texas. Above all, the company works as a service provider for the digital securities sector. Highlighting these services are the companies cap-table management capabilities.
CEO, Dave Hendricks, currently oversees company operations.
In Other News
Various blockchains have seen minor levels of adoption in the nascent digital securities sector. It would appear, however, as though Tezos have managed to establish themselves as a front runner in adoption levels. The following articles are examples of news surrounding Tezos in recent months, shedding light on why companies are turning to the popular blockchain.
Big Money Finds Bitcoin in 2020 – Hedge Funds, Service Providers, Intelligence Firms, and High Profile Investors
Since cryptocurrency markets began seeing a resurgence, months ago, there have been various instances of ‘big money’ getting in on the action. Examples of this can be seen on various levels, including high profile investors, intelligence firms, hedge funds, and service providers. Today we’ll take a look at each, and why an entrance is being made now.
Our first example is also the most recent occurrence. Only days ago, software giant and intelligence firm, MicroStrategy, announced to the world that they purchased a significant sum of Bitcoin. More specifically, MicroStrategy purchased 21,454 BTC, which equates to roughly $250M USD.
Michael Saylor, CEO at MicroStrategy, states,
“Our investment in Bitcoin is part of our new capital allocation strategy, which seeks to maximize long-term value for our shareholders…This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash. Since its inception over a decade ago, Bitcoin has emerged as a significant addition to the global financial system, with characteristics that are useful to both individuals and institutions. MicroStrategy has recognized Bitcoin as a legitimate investment asset that can be superior to cash and accordingly has made Bitcoin the principal holding in its treasury reserve strategy.”
To reiterate, the world’s largest intelligence firm notes that Bitcoin…
- is a dependable store of value
- has long-term appreciation potential
- appeals to, both, individuals and institutions
- is a legitimate asset
- can be superior to cash
As the aforementioned figures would indicate, MicroStrategy fully believes this, as it has put its money where its mouth is – to the tune of $250 million
Interestingly, Twitter sleuths have managed to find past commentary by Michael Saylor on his expectation for Bitcoin, back in 2013.
#Bitcoin days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.
— Michael Saylor (@michael_saylor) December 19, 2013
Michael Saylor cannot be faulted for this past tweet, though. At the time, the cards were stacked against Bitcoin and other cryptocurrencies. Adoption was woefully small, the technology wasn’t as developed, and it was traded on pure speculation. In the time since, however, Bitcoin has made believers out of many through addressing/conquering each of these issues. Never say never.
Paul Tudor Jones
When a hedge fund manager, worth nearly $6 billion USD, makes a move, people notice. So when Paul Tudor Jones announced, in May, that he would be allocating ‘low single-digits’ percentage of the Tudor BVI fund into Bitcoin, crypto enthusiasts understandably got excited. While ‘low single-digits’ may not sound like much, only a few percentage points allocated from a $5 billion fund represents a hearty sum.
“The best profit-maximizing strategy is to own the fastest horse…If I am forced to forecast, my bet is it will be Bitcoin.” – Paul Tudor Jones, CEO of Tudor Investment Corp.
Inflation. With the seemingly never ending printing of FIAT, many are looking towards safe-haven assets, as a hedge against expected inflation. Bitcoin is not the only asset to benefit from this sentiment – gold and other precious metals are also booming as well.
More than just a popular online-personality, Dave Portnoy is the founder and president of Barstool Sports. In recent months, Portnoy has captivated the attention of many, as he livestreams his day-trading activity. As a successful entrepreneur, worth roughly $100 million, with a strong online presence, his pending entrance into Bitcoin has excited many.
Portnoy most recently caught the attention of many with a public invitation to the Winklevoss twins. This invitation surrounded a desired introduction to Bitcoin, and how he can partake. This did not go unnoticed, as the Winklevoss twins saw this invitation, and accepted.
Invitation accepted 🤝 https://t.co/BhEjEKxfqi
— Tyler Winklevoss (@tylerwinklevoss) August 4, 2020
With over 1.3M followers, Portnoy indicates in past videos that he was feeling the pressure to re-evaluate Bitcoin, and the potential behind it. Although the Bitcoin community can at time be overzealous in its preaching, this trait appears to have done the trick in this particular instance. This pressure from his followers simply underscores the current appetites of many investors, as they look for high potential assets to mitigate risks of inflation.
While PayPal has yet to release official statements surrounding its intentions, it has become increasingly clear that the company is gearing up to launch cryptocurrency services in the near future. Speculation of this first came when the company began hiring cryptocurrency specialists for product development.
In addition to herding talent, multiple sources have shared information with news outlets, indicating an established partnership between Paxos Crypto Brokerage and PayPal – not unlike the recently announced partnership between Paxos Crypto Brokerage and Revolut US. Each of these partnerships would allow for the seamless integration of an API-based service, which allows for the buying and selling of a plethora of cryptocurrencies.
In its early days, Bitcoin straddled the line between fizzling out and becoming a respected asset. Fast forward to 2020 and if Bitcoin has made one thing clear, it is that it has staying power. We have reached a point in time where there has been enough development and adoption surrounding the sector, that the chances of Bitcoin fizzling out are all but nil.
With this being the case, who better to capitalize on Bitcoin, than an established FinTech service provider? Revolut has adopted it. Square has adopted it. WealthSimple has adopted it. RobinHood has adopted it. If anything, PayPal might be a little late to the party.
An Increasing Pace
Each of these instances on their own may not upend markets. Cumulatively however, they point to a positive shift in sentiment towards cryptocurrencies. While the ‘why now’ may vary between each new entrant, Bitcoin markets are no longer populated solely by speculative retail traders, but home to participants from a variety of sectors. It is viewed as a legitimate asset, and whether looking at service providers, hedge funds, intelligence firms, etc. – adoption is occurring at an increasing pace.
Traditional Banks Ramp Up Custodial Services for Digital Assets
In recent weeks, we have seen an increase in the adoption of blockchain services, among traditional banks. First, U.S. based banks were given the green light to custody cryptocurrencies by the Office of the Comptroller of the Currency (OCC). Now, we learn that one of the largest banks in South Korea, KB Kookmin Bank, is already working to develop similar services.
With regard to South Korea, the plan is for KB Kookmin Bank to begin offering custodial services for digital assets. This is a group effort involving the following companies,
This collaboration is particularly noteworthy, as KB Kookmin Bank is not just any old bank. They are currently the largest bank in South Korea. Moves made by a bank of this stature are followed closely by many. Although KB Kookmin Bank and its partners may be first to the table, expect to see others take a seat in the near future.
Future Asset Expansion
While initial services will centre on the custody of cryptocurrencies, it is believed that this support will eventually grow, encompassing various types of digital assets. More specifically, it is expected that in time, these custodial services will support digital securities.
In commentary released by Hashed, this expansion of supported assets was touched upon. Hashed states that through this collaboration, participants anticipate, “…that the digital asset industry will not only involve cryptocurrencies, but also other traditional assets such as real estate, artwork, and other reified rights that will be issued and traded on blockchain platforms.”
Although cryptocurrencies stand to benefit first, the development of such custodial services has the potential to transform and usher forth new growth among the digital securities sector.
Office of the Comptroller of the Currency
In the weeks preceding the news surrounding KB Kookmin Bank and its forthcoming custodial service, we saw the OCC release of an interpretive letter on the subject.
In this letter, the OCC breaks down, not only what digital assets are, but how banks can support the growing use. The OCC summarized its stance, stating,
“The OCC recognizes that, as the financial markets become increasingly technological, there will likely be increasing need for banks and other service providers to leverage new technology and innovative ways to provide traditional services on behalf of customers. By providing such services, banks can continue to fulfill the financial intermediation function they have historically played in providing payment, loan and deposit services.”
“…we conclude a national bank may provide these cryptocurrency custody services on behalf of customers, including by holding the unique cryptographic keys associated with cryptocurrency. This letter also reaffirms the OCC’s position that national banks may provide permissible banking services to any lawful business they choose, including cryptocurrency businesses, so long as they effectively manage the risks and comply with applicable law.”
Which came first, the chicken? Or the egg? This old saying could easily be applied to the current world of blockchain. Are these traditional banks jumping on board the train due to the recent resurgence being seen in the sector? Or is the sector surging due to banks jumping on board. Regardless of the answer, signs of blockchain adoption within traditional industries is a definite positive.
Hopefully, this swing in sentiment among banks continues to gain momentum, as banks have not always viewed digital assets in a positive light. Only months ago, we were reporting on difficulties being faced by German companies, as they were refused services by traditional banks.
KB Kookmin Bank
Founded in 2000, KB Kookmin Bank maintains operations in Seoul, South Korea. Since launch, KB Kookmin Bank has grown to employ over 25,000, while providing customers on a global scale with access to commercial banking services.
CEO, Hur Yin, currently oversees company operations.
Office of the Comptroller of the Currency (OCC)
The OCC is a U.S. based regulatory body, tasked with supervising national banks. This supervision is undertaken with the goal of ensuring fair and transparent financial services to all customers.
Acting Comptroller, Brian P. Brooks, currently oversees operations at the OCC.
What is Cryptocurrency Trading?
Ever since 2017, cryptocurrency trading has been an area of interest for new and old investors alike. Notably, cryptocurrency trading involves speculating on future price movements within the market. In its simplest form, trading requires the buying and selling of cryptocurrencies in a manner that produces profit. In order to accomplish this task, you need to have a firm grasp on what cryptocurrencies are and what affects their market movements.
Cryptocurrencies are decentralized digital assets that rely on a network of computers to validate their authenticity and the overall state of the network. Unlike fiat currencies such as the dollar, there is no government or central authority backing these coins. Instead, cryptocurrencies rely on mathematical protocols to reduce human intervention and provide the world with a truly unique financial instrument.
Importantly, cryptocurrencies exist only as a shared digital record of ownership. This means you can’t handle or even touch a cryptocurrency. Instead, these assets exist only in the digital realm. Consequently, no crypto transaction is complete until it is verified by the network nodes (miners) and added to the blockchain.
Different Blockchain Assets Require Different Approaches
Interestingly, there are multiple different types of blockchain assets one can trade today. Each asset has its own regulatory and trading requirements that you must adhere to. The three main types of blockchain assets in the market today are cryptocurrencies, utility, and security tokens.
Luckily, buying and selling cryptocurrencies has never been easier. Today, there is a multitude of exchanges in the market at your disposal. Each of these exchanges provides a different UX and features. As such, it’s recommended that you take a look at a few exchanges before you make your final decision. Also, savvy investors will also trade between exchanges when there is an opportunity to earn revenue on the spread of a certain asset.
It’s recommended that you stick with reputable exchanges. The reasons for this are simple, every couple of months some exchange experiences a hack that drains the platform of its holdings. When this occurs, you can lose your cryptocurrency if the exchange doesn’t have the ability to refund your losses. A perfect example of this scenario playing out occurred during the now infamous Mt.Gox hack where investors lost millions. Here are some of the most recognizable exchanges to consider:
The Binance exchange entered the market in 2017 with the goal to simplify the trading process for normal investors. The firm’s founder, Changpeng Zhao was already well known in the FinTech sector as the premier developer of high-frequency trading software. This technological know-how helped Binance create a unique UX and cement its position as an industry leader.
This simplicity helped the exchange grow. By 2018, Binance was the largest cryptocurrency exchange in the world in terms of trading volume. Today, the exchange still dominates the sector. Binance has since opened multiple platforms including Binance US, Binance DEX, Binance KR, and Binance Australia, to name a few.
The Singapore-based crypto exchange KuCoin was one of the first platforms to enter the market. Reports confirmed that developers began market research for this exchange as early as 2011. In 2013 KuCoin entered the crypto market as a dominant player.
Today the platform is known for its state of the art technology. The exchange features a combination of reliable and extended technical architecture. In this way, developers have been able to streamline the standard trading operations encountered by users.
The Poloniex exchange entered the market in 2014 with the aim to provide US clientele safe access to digital assets. Currently, the firm has a headquarters located in the Greater Philadelphia Area of the Southern US. The founder of the exchange, Tristan D’Agosta, is known for living a private lifestyle, despite making Fortune magazine’s 40 under 40 list.
Poloniex is known for its accessibility and overall market positioning. Today the platform offers over 100 BTC trading pairs. Additionally, traders are privy to advanced charts and data analysis tools to help further their investment strategies. Notably, the exchange charges a 0.2% transaction fee on all trades.
Bittrex is another market leader to consider. This firm has been in operation since 2016. The developers behind this platform wanted to create an institutional brokerage firm that could help bridge the gap between the traditional financial sector and the crypto markets.
Bittrex is well known for its industry-best security practices. Currently, the platform is one of America’s leading blockchain technology providers. As such, it enjoys a reputation as one of the most reliable exchanges in the world.
Let the Cryptocurrency Trading Begin
Once you have chosen an exchange that is known for its quality and security, you are ready to begin trading. Keenly, the setup process is simple. You just need to register with your new platform and fund your online wallet. Funding your wallet can vary in the processes required and depending on if you want to fund it with fiat currency or using other cryptocurrencies.
Notably, there is a tiny learning curve that you must overcome when switching between platforms. Each exchange utilizes a slightly different approach and interface. Additionally, there are variances in transaction times, costs, and daily limits to consider.
You will also need to take into account your location. Certain exchanges do not permit users from specific countries to participate in their platform. For example, you can only trade on exchanges that require KYC and AML regulations if you live in the US.
Whenever you are investing directly in cryptocurrencies, you purchase the coins themselves. This strategy means that you will hold the cryptocurrency you own and not just some form of ownership rights. It also means that you must pay the full value of the asset to open a position. Additionally, you will be responsible for finding a reliable wallet to store your holdings.
What Moves Cryptomarkets
Cryptocurrency trading requires you to make educated guesses as to market movements in the future. While no one can predict these movements with 100% accuracy, there are still some techniques used by professionals to mitigate risks while trading.
The first thing you need to understand is what actually effects market movements in the sector. Unlike stocks, cryptocurrencies are uncoupled from many of the economic and political concerns that affect traditional markets. In most instances, the cryptocurrency market moves according to supply and demand. Here are some important factors to consider:
The supply of a particular cryptocurrency refers to the total number of coins the firm will issue over the entire lifespan of the project. It also references the time frame and structure that these coins will be introduced to the market. Importantly, you also need to take into consideration the number of coins destroyed or lost as well.
The next factor you need to examine is the total market capitalization of the project you are interested in. The market cap is the total value of all the coins in existence for a certain project. Understanding the growth and retractions of a tokens market cap is critical to making informed price speculations.
Importantly, not all factors that affect the market’s movements are technical in nature. One of the most influential market movers in the sector is the media. You must pay close attention to how the media portrays cryptocurrencies. You will want to be aware of any potential developments that could boost or hinder large scale adoption in the sector.
Specifically, regulatory news can play a huge role in the market capitalization of a cryptocurrency. For example, the market took a big hit when China began a large scale cryptocurrency crackdown at the end of 2017. Considering the sheer size of the Chinese market, investors could easily tell that this decision would negatively affect the market in some way.
The next point to consider in your investment strategy is how well the coin in question is able to integrate into the current financial system. Tokens that feature easier integration are more likely to experience rapid growth in the market. This growth can be substantial when a coin is introduced to an already existing network.
A perfect example of integration providing a huge potential for upside growth can be found in Facebook’s Libra token. While this token is still under development and undergoing regulatory approval, it has more upside potential than most new projects in the sector. The reason for this inherent value stems from the fact that the Facebook network encompasses billions of international users.
Major events within the sector can provide a boost to the value of your investment in different ways. One such event, known as the halving recently took place within the Bitcoin ecosystem. This event occurs roughly every four years when mining rewards are halved. Historically, these events are followed by rising market values.
Cryptocurrency Trading Terminology
Like any profession, trading cryptocurrencies requires you to learn some new terminology. Luckily, this terminology is standard across the trading industry. Consequently, you will also gain valuable insight into trading other assets such as stocks and commodities.
The spread is the price difference at which you buy or sell your cryptocurrency. As such, spreads are variable depending on the assets, time of the trade, and the time it takes to complete your transaction.
When discussing trading assets, you may encounter the term lots. In this instance, lots is simply the term used to describe batches of cryptocurrencies used to standardize the size of trades. In most scenarios, a lot can consist of a single coin. These small lots are popular in the crypto space because they help to mitigate risk to volatility.
Cryptocurrency futures are agreements to purchase or sell crypto at a set price. Notably, these financial instruments allow investors to earn profits from cryptocurrencies without the need to actually own the assets directly. Nowadays, futures are used by investors to maximize profits. Miners also use futures to lock in profits against drops in value.
One of the advantages of trading futures is the ability to utilize leverage. Leveraged trading is an advanced investment strategy. It requires an investor to take a short term loan to fulfill their investment. In this way, investors can gain access to larger investment opportunities without the need to fully pay for the assets upfront. Leveraged traders only need to pay a small deposit when they open their position. This deposit is also called the margin.
The margin is the initial deposit you put up to open and maintain a leveraged position. Keenly, you need to be aware that margin requirements will change from broker to broker. Also, the size of your trade will play a part in how large of a margin is required.
Pips are units used to measure movement in the price of a cryptocurrency. The Pip can change depending on the platform and the pairing used. For example, in the US you can say that a coin raised one Pip in value if its market value went up one dollar. The key point here is that pips refer to a one-digit movement in the price at a specific level.
Another common phrase that you will encounter if you trade cryptocurrencies in the US is KYC/AML. Know Your Customer (KYC) and Anti-Money Laundering Laws (AML) refers to a legal framework that requires exchanges to verify the identity of users. All regulated exchanges in the US and EU require AML and KYC.
Trading cryptocurrencies can be a great way for you to earn some extra Satoshis and improve your understanding of the market. Remember, the difference between a successful investor and one that fails usually comes down to the level of research and their ability to stick to their investment strategy. Savvy investors know that the secret is to stay vigilant in your market assessments and you are sure to see some gains.
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