Coins & tokens are passé; investors are demanding equity stakes with governance rights, dividends, board seats, so on. What I don’t see slowing down is new ideas and technologies coming to the fore – there is a tidal wave of sweet projects in development globally needing capital. One model dies, a new one comes to life. Or in this case, back to life as VC funding is all the rage once again.
But the players are different and the landscape has a changed identity. I don’t think coins will disappear off the face of the earth, but they are now being added into deals as a perk, almost like an out-of-the-money “call option”. If Ethereum bounces, terrific, you’ll be long billions of coins; even if Ethereum continues to fall, you’re long an equity position in a company with real revenue, IP, clients, and a vibrant business model.
The “Invisible Hand” continues to exert influence on a nascent industry showing great promise despite deep flaws. SEC chair Jay Clayton remarked his agency wouldn’t change securities laws to bend to the whims of cryptos. Look no further than Floyd Mayweather and DJ Khaled – who were fined for promoting the sale of securities without disclosing being paid promoters – for proof SEC means business, as always.