Market On Open, Wednesday 13 August
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Don’t Sleep On Tokenization. Really Don’t.
by Alex King, CEO, Cestrian Capital Research, Inc
The second-largest cryptocurrency by market capitalization, Ether, has been captured by Wall Street.
This is a big deal.
It’s not about crazy crypto people, and it’s not about NFTs, it's not about Michael Saylor, or any of the other nutty stuff in crypto-land that alienates most sensible people.
It’s about the creation of a parallel financial system, where the defining concept is the “token” not the “security”. This is going to happen, the train has left the station, there is money to be made, and there are fortunes and homes that will be lost. All of which is also true of the securities market. The two systems will co-exist for a time and may in the end merge.
A token is a contract; offline, it would be a short document that said the owner of the token is entitled to x, y, and z but has the obligation to a, b, and c. Tokens are issued in the same way that securities are issued. The owner of an asset, seeking liquidity, issues a security (a stock or a bond etc) or a token (a custom creation), sells the security to get money, and everything flows from there.
These are the constituencies that will most benefit from tokenization.
- Asset owners.
- Brokerages.
- Custodians.
- Lawyers.
- Old-line and social media.
- Investors.
This is the constituency most likely to be wrecked by tokenization.
- Investors.
The supply side is going to have a decade+ long party creating, selling, storing, marketing and trading tokens. It is like all major religious festivals rolled into one, with the divinity removed and replaced with the Universal Money-God to whom all shall gladly worship and make blood sacrifice.
Investors are going to be (a) fleeced and (b) wildly enriched. And as an investor it is your choice as to which of those camps you choose. It is a choice. You can choose success if you (i) recognize this is happening (ii) get smart on how the new world will work and then (iii) start to deploy capital into the new world in a calm, measured, educated and risk-controlled way. Or you can choose Tent City under your local freeway if you just plow in and hope for the best.
This is why:
I believe we have a major edge here at Cestrian as to this new world.
Because the new world will be run on Wall Street rules, but its quarry will be those unfamiliar with the rules. If you think about the divide between winners and losers, Big Money and Chad, in current securities markets? Tokenized markets are going to make securities markets look like a welfare program to help the poor.
If you’re an Inner Circle member already, we have you covered. The only thing I suggest you do is to sign up for the algorithmic signals that will help you with investing or trading Ether - on which the whole new world is running - plus Bitcoin, Solana, and some key stocks. I use the algos personally every day in my own work. They are an invaluable sidekick.
If you’re not an Inner Circle member, and you want to use our work to help you win in the new world, can I suggest you either:
- Join Inner Circle to get our absolute best work all in one place, to join our wonderful community of investors and traders in our chat and alerts system, and to get access to our weekly live webinar - in short, to join the team, or:
- Join our Big Money Crypto service which is solely focused on the new world. You can sign up for the newsletter alone (get the paid version if you can), or the algos, or both.
This is where you go to learn about these services, and to sign up too:
If you’re already a subscriber to any of our other services, we’ll always provide a discounted price as a thankyou. Just drop us a line at minerva@cestriancapital.com and we can get you your best price.
Now let’s get to work. Here’s our daily subscriber-only take on the US equity indices, volatility, bonds, oil, crypto, and key sector moves.