The industry surrounding blockchain technology has certainly helped to drive more interest from investors. Fortune 500 companies, trillion-dollar banks, and some of the largest investors of our time have signaled fresh opportunity in new breakthroughs within this market. Where the topic was introduced through the boom in things like bitcoin and Ethereum, blockchain technology has become far more valuable that just a means to track cryptocurrency transactions.
The fact of the matter is this: hundreds of billions of dollars have been and continue to be pushed into this market with investors getting immediate and direct exposure to things like blockchain technology by putting their money into the market; not into the cryptocurrency market but directly into the stock market. In fact, after the initial crypto boom, most of the attention has shifted toward the technology side of this industry versus the currency side. The result has been clear, breakthrough technologies that aim to change countless other industries across the globe.
Block One Capital (BKPPF) (BLOK.V), for instance is making the move take full advantage of blockchain technology by executing through its strategic investments already in the works. The company has simplified the process through an offering of class leading investments across multiple segments of this new industry.
Turn Back The Clock And Learn From Past Trends: New Focus Is On Blockchain Infrastructure
Investors have already seen early opportunity with many stocks that have made previous moves due to the progress and excitement surrounding blockchain technology. Eastman Kodak Company (KODK) is most notably built on the imaging industry but had found incredible success in its recent diversification strategy. Kodak and WENN Digital Inc. announced the launch of the KODAKOne image rights management platform. The platform itself was built to empower photographers and agencies to take greater control in image rights management.
Utilizing blockchain technology, the company has expressed that KODAKOne will create an encrypted, digital ledger of rights ownership for photographers to register both new and archive work that they can then license within the platform. Following several related announcements, share of KODK managed to soar from under $3 to as high as $13.28 within a matter of weeks.
In line with that trend, Net Element's (NETE) blockchain-focused business also managed to attract a diverse and very bullish sentiment all focused on a decentralized ecosystem acting as a framework for value-added services. Net Element had explained that the ecosystem could connect merchants and consumers directly utilizing blockchain technology.
It also would be capable of increasing the speed and efficiency of transactions made through the Company's processing, settlement and services ecosystem. Previous to its diversification strategy into blockchain technologies, Net Element was trading around $2.50 before running to highs of over $33.50. Shares of the company saw a strong pull back but are still trading over 3.5 times higher than they were in December of 2017.
With facilities in northern Sweden and WA State, MGT Capital Investments, Inc. (MGTI) ranks as one of the largest U.S. based Bitcoin miners. Though the company hasn’t taken the leap to focus entirely on blockchain technology, the blockchain itself is a vital part of the entire cryptocurrency ecosystem. Further, the Company continues to execute on an expansion model to grow its assets materially.
The company recently sold of its cyber security product, Sentinel to focus entirely on its cryptocurrency operations. Though cyber security and crypto front man, John McAfee has decided to leave the company as Chief Cybersecurity Visionary, he remains a “major stakeholder”.
"I would like to thank Steve, Rob Ladd and the entire board for giving me the opportunity to return to corporate life, but I am very happy with my decision. I am looking forward to toiling in obscurity as the world's foremost authority of all things cyber and crypto! In all candor, the past two years have been action-packed and productive, and I want to thank all shareholders for their support. I leave MGT in much stronger condition than when I arrived and remain a major stakeholder," said McAfee in a recent press release.
MGT was trading at levels that were under $1.50 late last year before jumping to over $8 per share during its expansion into the blockchain technology space. Obviously the previous winners within this industry have come and gone, but now that investors have become more informed, they are better prepared to read the tea leaves for the next wave of potential within the space.
The Billionaire Effect
The usual case for any “early boom” industry has been traditionally driven by highly speculative and generally high-risk investors during the first wave of interest. But as far as blockchain technology is concerned, we aren’t just seeing high risk traders coming into the market, we are also seeing experienced and long standing financial figure heads taking aim at companies involved in the blockchain space.
George Soros and his Quantum Fund, for example has already been the focus of several articles that highlighted his investment into Overstock.com (OSTK) specific to the company’s blockchain platform & plans to further advance the technology.
Patrick Byrne, CEO of Overstock confirmed that a significant part of the investment from George Soros would be used to fund blockchain work undertaken by the company. He added that a cool $20 million would be used to fund DeSoto Inc., which is a joint venture in blockchain property venture. Byrne also expressed that as the company develops the blockchain companies and blockchain applications, its retail business would be significantly valuable in bringing traffic and awareness to its blockchain properties that the company expects to grow.
Furthermore, staunch opponent of bitcoin cryptocurrency, Jamie Dimon of JPMorgan is actually bullish on the utilization of blockchain technology. The J.P. Morgan CEO sees promise in blockchain going as far to state, “The Blockchain is a good technology, we actually use it, and it would be useful for a lot of things….JP Morgan moves $6 trillion around the world every day. We don’t do it in cash. It’s done digitally.”
There is even a dedicated portion of the company’s website dedicated to blockchain technology and how it will benefit the public.
“The Blockchain Center of Excellence (BCOE) leads efforts for applications of distributed ledger technology (DLT) within J.P. Morgan. We are exploring blockchain use cases and piloting solutions across business lines. We are active in the blockchain ecosystem: developing technology, investing in strategic partnerships, and participating in cross-industry consortia.”
Diversification to Expand Revenue Generation
In the case of Block One Capital (BKPPF), the company looks to deliver on core divisions that are focused on the advancements that blockchain technology has achieved.
1. Finzat Block LLC: A Blockchain Solution for the US Mortgage Industry
Block One has acquired 40% of Finzat Block LLC, a New York based mortgage blockchain company aiming to streamline and digitize the US mortgage market using innovative blockchain applications to create a system which is Simple, Auditable, Fault-tolerant and Efficient (SAFE).
Finzat has named Michael W. Moore as the company’s Chairman. Mr. Moore is a recognized leader in mortgage finance and investment and risk management. During his 15 years as the senior-most financial executive with the Chicago Federal Home Loan Bank, he was the co-developer of Mortgage Partnership Finance, a mortgage origination platform whereby Federal Home Loan Bank members participate in a unique risk sharing arrangement with their respective FHLB optimizing benefits for both parties.
Since the mortgage industry is a $9.9 trillion sector Block One Capital can utlize its Finzat arm to lead the transformation of the US mortgage collateral and compliance marketplace by applying advanced blockchain principles. Obviously like many, the mortgage industry is ripe for blockchain solutions to drive efficiency, reduce costs, streamline workflows and improve the customer experience.
2. CUIPO: A Social Initiative for Rainforest Preservation
CUIPO is a London UK based technology business harnessing the power of blockchain to digitize and democratize the purchase and preservation of natural land assets. They specializes in technologies and infrastructure created to save and protect endangered lands. They do this by the gamification of online conservation efforts, achieved by using a patented virtual grid system and tokenization method, one square meter at a time. CUIPO’s revenue streams will be: product licensing, educational gift card products, global event and festival sponsorship opportunities and creation and management of Corporate Social Responsibility services for medium to large enterprises. Though this may seem like a simplistic or minor business arm, the spending that goes into environmental preservation is immense and thus creates an open opportunity for blockchain technology intervention and further the accountability that comes along with it.
Access To Capital Is Key For Growth
Block One increased has been able to increase its financial strength through key capital raises that totaled $10 million to this point. This particular raise was conducted at $1, which is currently higher than where the market is right now. As of March 2018, shares of Block One are trading below this level with a price range of roughly $0.58-$0.63. It should also be noted that in relation to the raise, all securities issued are subject to a holding period that lasts well through the month of April.
“We are very pleased to have completed a successful oversubscribed financing in such a short period of time. Our model identifying early stage, high growth opportunities with the best in class management has resonated with the investment community. We remain focused on the business plan execution for our two recently announced investments and also the potential in our growing pipeline of additional investment opportunities,” explained David Berg who is a current director of Block One.
Conclusion
Don Tapscott, author of “The Digital Economy has said, “The first generation of the digital revolution brought us the Internet of information. The second generation — powered by blockchain technology — is bringing us the Internet of value: a new platform to reshape the world of business and transform the old order of human affairs for the better.”
Even the former US Treasury Secretary, Larry Summers has stated that blockchain technology will be a game changer, “I’m reasonably confident … that the blockchain will change a great deal of financial practice and exchange.”
For companies entering the next phase of blockchain technology expansion, Block One Capital (BKPPF) (BLOK.V) has been a clear example of how companies are working to meet the growing demand for industry evolution. Though this is still a young and early stage industry, it isn’t just high-risk day traders taking a shot at this opportunity either.
As noted previously, there is obvious and growing interest coming from some of the leading financial figureheads involved with the stock market; George Soros and Jamie Dimon being a few notable names. Timing for this new industry could mark a profound turning point where new technology like blockchain ends up pushing the limits of traditional marketplaces like mortgage and housing to new and exciting bounds.
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