Matt Dibb, the leading analyst of the STORating came up with the four following predictions for the security tokens market in 2020%:
1. Tokenized Securities (TS) will be bigger than Security Tokens (ST)
According to Matt, tokenized securities are ‘the wrapping of a traditional and usually ‘tradable’ financial products into a token.’
Security Tokens, on the other hand, are ‘the creation of a new product that is backed by a particular asset.’
Judging by the interest we are seeing from larger institutions, banks and sovereign entities, the former is going to gain much more adoption, more liquidity and significantly more interest from institutional players by the year 2020.
2. The first successful asset-backed token will be based on fractionalizing the ownership of a huge private tech-company or existing close-ended tech-fund.
How cool would it be to have secondary market liquidity for SpaceX, AirBnB or Sequoia? The concept of this completely changes the mechanics of venture capital and private market funding.
No more pressure for IPO, no more huge costs and best of all, liquidity and the ability to participate from the market globally.
From our point of view, we see this type of offering as revolutionizing the investment market in almost all asset classes. It’s going to take one awesome company to get the trend moving.
3. Most existing ICO exchanges will fail in moving across to Security Tokens
The world of crypto-exchanges in their current form are still very much stuck in the days of the wild-west. With non-existent KYC and AML, questionable security practices and a general disregard for regulation, any player that tries to move will likely fail.
In addition to this, those larger crypto exchanges that do well (Binance), likely wont take the legal and credibility risk to expand to such a complex and heavily regulated asset class for fear of contamination in their existing business.
The exchanges that ‘make it’ in the security-token world will be from traditional roots, work close with government and avoid the gun-slinging mentality that ICO’s are so very accustomed to.
Love him or hate him, Arthur is one of the smoothest operators out there. The profitability of Bitmex alone (we believe) makes it one of the most valuable companies across the industry.