Security Tokens: Just a Joke, Or Are They the Future of Investing?
In mid-September, the Digital Assets and Security Conference (DaaS Conf) in Austin, TX, was a great success. This event provided a look into the future of how the Security Token industry will be molded. We at Blockchain of Things were excited to take part in the DaaS Conference. It was interesting to see how far the industry has come in such a short amount of time!
In 2018, when we did our initial BCOT Security Token offering, an event like this was far from sight. Security Tokens were once considered and talked about as a joke in the crypto industry; it’s not so much of a joke anymore. The industry is snowballing, and top companies are taking notice.
Although the Security Token industry is still relatively small, it seems to be very cohesive. Companies are working closely together to provide an end-to-end regulated offering, making it easy to onboard new companies interested in listing Legal US regulated Security Tokens. There has also been a significant increase in companies launching ATS’ (Alternative Trading Systems), such as Oasis Pro Markets, one of the many DaaS Conf sponsors.
This conference was a huge accomplishment for the Vertalo team! Only three months ago, Vertalo decided to throw the Digital Assets and Security Conference. It was nice to hear from Dave Hendricks, the CEO of Vertalo, say that “This conference will be the smallest it will ever be!”. With about 250–300 people in attendance and three conference days, it was the perfect size and amount of time to meet everyone that attended, to really build relationships, and to make those desired connections. We are looking forward to seeing the collaborations that will come from this event in the near future.
With so much diversity in the audience, it was interesting to see all of the different companies and industries interact. We were able to see everything from Cryptocurrency Protocols for token issuance, offering strategies, transfer agents, and ATS Exchanges. One of the most interesting aspects was the different types of tokens being offered or looking to be offered in the future. A Company was looking to tokenize lithium mines in South America! There was a predominance of companies tokenizing real estate. It’s evident that these STOs are taking on all sorts of different underlying assets. However, one of the most unique Security Tokens at this event — Ready for a shameless plug? — are the BCOT Security Tokens!
Blockchain of Things’ Security Tokens (BCOT) are quite unique and very different from other Security Tokens currently in the market. The difference between most Security Tokens and the BCOT Security Token is that not only does the BCOT Security Token represent the intellectual property of the Blockchain of Things product, Catenis, but they also correlate directly to the underlying bitcoins that the platform spends when Catenis services are utilized (e.g., logging to the Bitcoin blockchain, sending a message, issuing tokens, etc.).
The BCOT Security Token, when consumed by Catenis, is exchanged one-for-one with a Catenis Credit that is then added to a user’s account. These credits are spent when used to pay the Bitcoin Blockchain fees. Why is this such a big deal? Well, as mentioned above, most Security Tokens directly represent an underlying asset such as equity in a company, real estate, gold, etc. The BCOT Security Token is currently the only Security Token directly correlated to bitcoin, in addition to the technological intellectual property of the Catenis platform. How does this correlation work? More Catenis Credits need to be consumed as the price of bitcoin rises. So, we would expect the price of the BCOT Security Token to rise in direct correlation.
The closest example we know of to the BCOT Security Token is what Michael Saylor’s company, MicroStrategy, is doing. MicroStrategy’s stock is loosely correlated to the bitcoins they continuously buy and hold in their company’s treasuries. For this reason, MicroStrategy’s market cap has significantly grown in the last year.
“The world is waking up to the fact that bitcoin is a digital property on an open monetary network. That’s pretty profound because it’s going to spread to billions of people on the planet.” — Michael Saylor, Co-Founder & CEO of MicroStrategy.
So much positive outlook came from this event, but of course, a continued lack of clarity from regulators in the Security Token space was a big eye-opener for us. Companies are working diligently to stay in compliance with US laws and regulations to take advantage of these new technologies. The slight disconnect seems to come when this new market realizes the technology can streamline cumbersome processes yet to be considered in the present-day regulated structure. This lack of clarity vocalized by some of the law firms presenting at the DaaS Conf came as no surprise since we had to deal with regulators firsthand when registering our BCOT Security Tokens over a two-year period from 2018–2020.
“I believe that the Security Token market is having and will continue to have a much easier time achieving regulatory clarity with the SEC than what is happening in the traditional crypto space. Seeing as many parts of the Security Token markets map directly to traditional regulated requirements, I expect this space to continue to grow rapidly and all the kinks worked out quickly,” says Andre De Castro, our Founder & CEO.
To give an example of how rapidly this industry has grown over the years, as of September 2021, the Security Tokens market cap surpassed the $1 billion mark ($1,109,675,934.65 to be exact), representing a 3.70% monthly change. As we enter Q4, we are excited to see where the rest of 2021 will lead us. As for 2020, the closing Market Cap was $366,523,463, with 2020 opening Market Cap at $59,339,362.52 which is a +517.67% change. The 2020 Total Trading Volume was $69,686,186.19 a Monthly Average Volume of 5,806,947.61, which is a +1,105.67% change.
Overall, it is clear that the future is bright for Security Tokens, and we are happy to be one of the companies leading the way for this growing market. It’s fascinating to watch this industry grow and even more exciting being at the forefront.
If you want to stay up to date on our BCOT Security Token and our Catenis product, make sure you are following us on our social media accounts BlockchainOT and Telegram.
-Written by Amanda Mirus
