Capital Markets Insights

4 Reasons Crypto is Permanently Changing Capital Markets

Katipult at Tokenomx - Brock Murray and Kien Diep

Katipult took part in the inaugural Tokenomx crypto conference in Chiang Mai, Thailand at the Le Meridien Hotel on April 18-19, 2018. Katipult also co-hosted a Speaker Dinner event with its Thailand-based customer iLab, at the highly acclaimed David’s Kitchen for all VIP ticket holders, speakers, and sponsors from Tokenomx. Over 100 people showed up for the event.

With the gathering of CEOs, Founders, Attorneys, Investors, and Developers, the discussions focused on ICO public and private sales, ICO fundraising, tokenomics, whitepapers, and future insights into the blockchain industry.

Below are Katipult’s 4 must-know themes for all private capital market participants:

Raising capital via token sales are the future

While the VC industry has faced increasing competition from the ICO concept in 2017, entrepreneurs increasingly view this method as a better option for raising capital than traditional VC. The dilution, level of control, expediency of the raise, and overall attitude are in favour of token sales. Katipult expects to see more and more companies leveraging this method of financing for both company raises as well as asset-specific raises i.e., real estate, agriculture, etc. Katipult also expects more credible, established firms will enter the crypto markets in 2018 with the announcements of their own token sales and use of blockchain technology. Cryptocurrencies are here to stay.

Utility versus Security tokens 

The intent of the purchasers of a token sale has been the focus of determining whether the sale is a utility token versus a security token. While many token sales may sound like a utility in terms of the expected use cases, regulators are cracking down on token sales that are promoting speculation from purchasers. If you are marketing a token for a product that already exists or will exist in the near future and it’s not going to be listed on any exchanges until its used within the product ecosystem, its likely a utility and that label can be justified. If you are marketing to purchases with no product in the short or medium term and the token starts trading on a secondary exchange (with no real apparent use case), regulators are going to view the token as a security.

Crypto Exchanges are moving offshore and to hospitable locations for their operations

With growing concerns of regulatory interference with the operations of Crypto Exchanges, these companies are migrating to countries deemed safe and secure to conduct business from. These moves are seen as encouraging by the crypto industry to reduce risks associated with unfair interference or penalties placed on some exchanges already. There are a host of countries in Eastern Europe, the Caribbean, and the ever popular Malta to relocate.

We are in the nascent stages of a fundamental transformation of capital markets

While Katipult expects to see many failures among the overhyped blockchain projects and coins already trading on major exchanges, there are many great projects in existence and many more upcoming projects that will be the future of the decentralized crypto economy. This industry is still very early days and the implications it will have on of private capital markets will be significant and transformative in the coming years. Education and participation are two key ways industry incumbents can stay relevant.

Katipult is very excited about these market developments and leveraging Blockchain technology into its product for both secondary trading as well as investor onboarding processes such as KYC.

About Tokenomx

TOKENOMX is an exclusive three-day networking and education event for traders, investors, and entrepreneurs in the blockchain space. They bring together key stakeholders including CEOs, Founders, Entrepreneurs, Creatives, Attorneys & Developers. The program focuses on wealth generation and financing topics such as crypto trading strategies, ICO public and private sale allocations, ICO fundraising & marketing secrets, token analysis, technical analysis, whitepaper and website case studies, and future industry insights.