Think cryptocurrency is just for transforming digital economic practices? The changes might run deeper than you realize. In addition to representing a marked difference in how people engage in transactions, cryptocurrency is reshaping the business formation landscape for startups in search of essential capital. As cryptocurrency visionary, investor and entrepreneur Ian King notes, a great deal of crypto’s revolutionary power may just lie in the startups that are pushing the field forward.
The Current Startup Playing Field
New companies that want to make it big commonly seek venture capital, commonly referred to simply as VC. By talking to habitual investors and explaining why their ideas are worthwhile, entrepreneurs hope to receive the money that helps them pursue their dreams.
Will this classic “Shark Tank”-style model survive the coming funding revolutions in the realm of crypto? King, who serves as a contributing editor to Banyan Hill Publishing and routinely writes expert articles about cryptocurrencies, such as Bitcoin, highlights a number of interesting possibilities.
Cryptocurrency and the Evolution of the Average Investor
Nontraditional investors may view crypto opportunities as more accessible ways to get into investing. With the proliferation of new crypto ventures came industry leaders seeking funds from wherever they could find them. Many adhere to crowdfunding models where people who want to invest can do so for extremely small amounts of money. By lowering the financial barriers to entry, these startups attract a broader pool of investors than traditional VC series typically enjoy.
To say the least, cryptocurrency is a uniquely attractive asset class that creates special opportunities for early investors.#Cryptocurrency #Currency #Crypto #Bitcoin #Ethereum #Litecoin #Entrepreneur #InternalAnalyst #Banyanhillhttps://t.co/ej8yWVIEEM pic.twitter.com/xS3KwpKow2
— Ian King (@IanKingGuru) March 15, 2018
Egalitarian Investment Access
Investors also like the fact that they can partake for very little capital. In the old days, companies leaned heavily towards VC, which meant that the majority of investable shares and equity got eaten up in the beginning stages. People who wanted to get in while the getting was good and make significant returns over time had to settle for playing second fiddle to billionaires and monetary institutions. In the same way that cryptocurrency democratized financial systems, crypto startup investments promised to make corporate stake-holding increasingly accessible.
The Impacts of Market Awareness
According to King, whose opinion is tempered by more than two decades of financial market trading and analysis experience, there’s another critical factor. Unlike other business domains that remain up in the air, cryptocurrency already has its roots sunk deep into the collective consciousness.
Ian King says that the popularity-driven bubble we’re currently observing includes many of the typical familiar faces. For instance, there are way more prospective investors looking for opportunities than there are companies seeking investment. There are also tons of people with skin already in the game who aren’t sure what’s going to come next.
The Proof of Change Is in the Funding
With cryptocurrency’s total market capitalization taking a wild growth ride of 25,000 percent in just one year, it’s hard to argue that crypto doesn’t have a big impact on the global monetary system. Since $500 billion of the world’s money is already invested in cryptocurrency, future shifts in the market could have substantial ripple impacts elsewhere.
What’s been driving the ongoing investment in cryptocurrency? One of the most important factors is the initial coin offering, or ICO. This crowdfunding strategy involves cryptocurrency creators selling some of their cryptocurrency to investors for cash or other kinds of cryptocurrency.
By holding ICO sales when their cryptocurrencies launch, entrepreneurs can
- Raise massive funding in an extremely short period,
- Shield startups and investors from having to comply with regulations, and
- Leverage hype and fear of missing out to build public attention.
As you may have guessed from these factors, there’s plenty of controversy surrounding ICOs. Many of the countries that cracked down on cryptocurrency started by forbidding ICOs entirely. Platforms like Facebook even banned advertisements for ICOs.
The Rise of King’s Cryptocorn
The backlash against ICOs aside, it looks like few things have the power to put a permanent damper on crypto investment. In an astoundingly short time, numerous cryptocurrency startups have achieved unicorn status, or valuations over $1 billion. As seasoned observer Ian King puts it, these cryptocorns are indicative of the fact that investors are chomping at the bit to get involved.
Interestingly, the majority of cryptocorns are still subsidized by larger investors, such as VC hounds and the wealthy. Historical trends could drive the next shift, however. In the past, smaller investors have found themselves fighting to survive losses after sinking their funds into tech companies that petered out after their initial public offerings and early funding rounds.
Although ICOs have their downsides, it’s important to remember that they’re not the only way to invest in crypto. For instance, any investor can go out and buy cryptocurrency at will without having to back a particular startup. Since it’s relatively easy to exchange digital currency, these investors also have the power to avoid market capitalization dips associated with specific types of crypto.
Ian King’s time well-spent watching classic stock markets and the birth of the cryptoasset field serves him well as he makes predictions for the future. With all of the ripe fruits that crypto bears, there are also bound to be sour grapes. As the excitement spreads, there’s no telling when the popularity bubble might pop. Still, the fact that there are so many intelligent ways to get involved bodes well for investors who aren’t just trying to make a quick buck.
Modern cryptocurrency markets are becoming more useful for everyday transactions and value storage. Investors may benefit from having a stake in the system instead of merely scrambling to prop up key players or anticipate the next hot thing.
Ian King’s unique knowledge reflects more than 20 years of experience as a market observer. His BS in psychology from Lafayette College makes him particularly well-equipped to analyze the roles that investor confidence and technology adoption play in economic growth.