The Future Of Cryptocurrency in Global Investment in 2019 By Ana Bencic

By Ana Bencic, founder and CEO of NextHash PLC.

Investment 

Uber Technologies Inc.’s sizable initial public offering launched in May and the ride-hailing application has run into some complications. Uber intended to go public with a $120 billion valuation, which was pitched by bankers at both Morgan Stanley and Goldman Sachs ahead of its IPO. Conversely, the company finally listed with a $75.5 billion market cap. The New York Times described one cause as being that institutional investors, who privately owned Uber stock, would not purchase extra shares at a greater price point.

As a result, Uber priced its IPO on Thursday 9th May at $45 a share, putting the IPO well behind other big offerings on the U.S. market in recent years.

Initial Public Offerings can empower companies to raise fresh equity capital; to monetise the investments of private shareholders such as company founders or private equity investors and enable easy trading of existing holdings or future capital raising by becoming publicly traded enterprises.

There are potential burdens for businesses looking to list. Accounting, marketing and legal professionals’ fees may well be sizeable, as well as demanding significant time and effort from the management team, distracting them from their primary task of running the business.
For companies that are on the frontline of technological advancement, time is of the essence.

According to Street Directory, an IPO usually takes between six and nine months. Occasionally, this process can take up to 18 months and such a hold-up can knock unicorns off their path to a £1 billion valuation, giving their rivals a huge advantage. What other prospects do highly scalable businesses have?

The Crypto Market

The cryptocurrency market provides unique opportunities for businesses that require vital growth finance and for investors seeking early access to potential unicorn businesses. Cryptocurrency platforms’ ability to operate across borders is a unique advantage and one that isn’t enjoyed by traditional markets.

In April, the French parliament approved a financial sector bill which encourages cryptocurrency issuers and traders to set up in France. Firms wanting to issue or trade cryptocurrencies will be able to apply for official certification. The certification process demonstrates a degree of official recognition of the cryptocurrency market.

Bills like this enable investors to trade and invest cryptocurrencies, as well as facilitating businesses to be traded as a Secured Token Offering which would give investors, traders, and entrepreneurs a way to trade and exchange tokens for cryptocurrencies, bringing the ecosystem into the cryptocurrency world. In exchange for charging tax, France is laying the foundations for the Europe-wide adoption of cryptocurrency trading.

There has been a largely positive attitude towards cryptocurrency by some countries. Malta, Slovenia and France are encouraging the implementation and use of cryptocurrency for trading and investment. The ability to invest or trade freely across borders is attractive for businesses, who are able to receive financial investment from foreign parties.

With Brexit on the horizon for the UK, economists are making their predictions about how the value of the pound will be affected. Due to the interdependence of the pound and euro, some claim there will likely be some loss in value to the traditional currency. Cryptocurrencies offer an alternative to traditional, FISA currencies for both consumers and companies, due to being decentralised, transparent and wholly unaffected by the Brexit situation.

With disparate regulation and legal frameworks across the globe, platforms that enable a company or investor in one jurisdiction to trade or exchange tokens or currency with another trader in another country with a different statute could open the doors to potential unicorn companies to thousands of family offices, hedge funds and institutional investors in a matter of years.

Conclusion

The growing prominence of blockchain-based cryptocurrencies is easy to see today. With the increasing pace of adoption by mainstream institutions, the formation of digital-assets trading platforms and cryptocurrency-specific legislation passing in multiple countries both inside and outside of the EU- cryptocurrency is seeing far greater usage by institutional and private traders/investors. With the ability to invest in a company from anywhere in the world and with a far greater potential for a rapid return on investment, cryptocurrency offers rewards that have fortified its place in the world.

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