Security Tokens Hit a Major Milestone
I’m stepping in for Andy this month as we take a look at what’s happening in the world of digital assets.
Big things are afoot.
Not one but TWO pro-crypto bills have advanced in the U.S. House of Representatives with (rare) bipartisan support.
The bills seek to create a regulatory framework for stablecoins and to define what makes a cryptocurrency a commodity versus a security.
Most importantly, they aim to lay out a proper path for crypto trading platforms to register with the SEC.
If you’ve been following along, you know that everyone from the folks at Coinbase and Binance to House Majority Whip Tom Emmer has been firing back at the SEC for its laissez faire approach to crypto regulation. These bills could go a long way toward getting everyone on the same page.
Of course, there’s still plenty that needs to happen before any of the above becomes law. And with history as our guide, we can rest assured that whatever passes – eventually – will look quite different from what’s currently on the page.
So it goes.
Let’s turn, instead, to a corner of the digital world that isn’t so rife with conflict.
As we predicted, security tokens are flourishing in 2023.
In only a few years’ time, the security token market has grown to a market cap of more than $17 billion.
It’s now the same size the crypto market was at the start of 2017. (The total crypto market cap, for the record, is presently just over $1.15 trillion.)
Adoption is ramping up. Investment banks around the world have begun testing the waters, issuing tokenized public bonds and even loans.
Earlier this year, Goldman Sachs launched a first-of-its-kind tokenization platform for its clients. The European Investment Bank was the first to use it, issuing a two-year digital bond worth 100 million euros.
That’s huge.
But it’s only the beginning.
A survey of financial institutions found that more than 75% of respondents believe traditional securities – like stocks – will be digitized within a decade.
Transactions will become not only faster but also cheaper. It’s a no-brainer for Wall Street and big banks worldwide.
You know our thoughts on the future of the space. Investing in security tokens has the potential to be like investing in the internet back in the early 1990s.
It’s why we were among the first – if not the first – to introduce a product like Manward Novus. And it’s why our first recommended investments were in the exchanges that are propelling this new technology forward.
INX (INX) and tZero (TZROP) could very well represent the future of trading.
INX has had an especially strong year so far. It recently accepted a $5.25 million investment from Republic. The Morgan Stanley-backed digital bank had its eye on INX’s unique platform.
“By integrating INX’s digital trading infrastructure for financial markets with Republic’s expertise in primary distribution, we are redefining the way capital is raised and empowering both institutional and retail investors globally,” said Republic’s CEO Kendrick Nguyen.
Elsewhere in our portfolio, our Aspen Digital (ASPD) tokens continue to climb. As we noted in our May update, the luxury hotel behind them is attracting investors at a rapid clip.
When we first got in, fractional shares were trading for $1.05. Today they’re worth roughly $2.90… a 175% gain.
Nice.
Exodus Movement (EXOD), our most recent pick, has also treated us well. It’s a certified leader in crypto storage, offering mobile, desktop and even physical wallets to folks who need a safe place to park their crypto.
When we first recommended this one, it was trading at $2.99. Today it’s hovering around $3.50.
We expect to see even bigger gains as the company dominates its unique but highly profitable segment.
It’s just more proof of the strength – and opportunity – in this fast-growing market.
With security tokens, we’re betting on a bold new vision of investing.
We’re far from alone.