A new trend in Consumer Finance: Fractional investment is coming to community-led real world assets

Nexus Mutual, B2C2, Local Bitcoins, Bitfinex, Azimo, Vodafone, Samsung, SIX Partneship with Omniex, The Bank of England and digital currency

hi Everyone, Thank you for supporting the European crypto ecosystem 🇪🇺.

We are looking for late stage crypto / blockchain or companies leveraging new data management system from Europe. Companies with a revenue of €10m+ or 100+ FTE. Such as Ledger, Elliptic, Chainalysis, Deribit, Paxful, Blockchain.com or Bitwala.

Etienne Twitter, ebrunet40@gmail.com )

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We want to thank our partner NovitasFTCL, a leading boutique firm of corporate finance advisors to the European Financial Technology sector. 

Based in London, NovitasFTCL has 45+ years of combined experience in the FinTech sector and executed over 120 transactions across Europe including M&As and Fundraisings. 

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A new trend in Consumer Finance: Fractional investment is coming to community-led real world assets

  • Over the next 30 years, an estimated $30 trillion of wealthwill exchange hands from the baby boomers to Generation Xers and Millennials. Unlike their elders, these demographics want to be their own financial advisor and invest directly in companies and themes they believe in.

  • However, most Millennials have limited savings facing challenges to invest in inflated assets and have a collective distrust of banks. They also want to invest in assets they understand, trust an can use.

  • The democratisation of the stock market with commission free and fractional share offering were the first steps to a broader trend around investing in community-led real world assets.

  • Unlike with Bitcoin, luxury and art assets are not fungible. This means that the transaction cannot happen on order books diminishing liquidity and market size.

  • We are about to see the rise of community-led real world assets driven by:

  • 1. The growth of online secondary marketplaces for luxury store of value items — Consumers want to invest as easily as they do with Bitcoin in sneakers or arts. With a higher number of vetted marketplaces, the liquidity will improve and the price discovery will be more efficient. This in turn will attract more users interested in both the store of value elements as well as being able to use / wear items.

  • 2. The democratisation of fractional investing — The move to fractional trading transform non-fungible asset to fungible assets that can be traded via order book based transactions. This is one of the biggest breakthrough in the consumer investing world. Even though there is still a need for over the counter agents to ensure authenticity of the items; trading can finally happen for niche & illiquid assets at scale.

  • The wide use of fractional shares will widen the investable asset market by moving exchanges from one-to-one transaction with a broker model to many-to-many transaction with an exchange model.

  • A new capital markets ecosystem is created giving opportunity to both entrepreneurs and investors. Companies to watch include Poshmark (Fashion), StockX (Streetwear), Goat (Streetwear) or ThredUp (Fashion) and my favourite Chrono24 (Watch) as well as Rally (Alternative assets) and Otis (Alternative assets and art)


🐦 Tweets of the week

Chamath is known for its 2013 Bitcoin article and recently reiterated its view…

meanwhile, USDC balance decrease over time on Binance…

🤹 Startups News

  • Local Bitcoin sellers demand 50% premium in Lebanon amid strict capital control limits [Link]

  • DeFi firm Nexus Mutual, which offers an alternative to insurance, has quietly resolved two vulnerabilities. One was similar to what bZx experienced recently; another was related to its governance system. Nexus Mutual said it will pay $7,000 in bug bounties to researchers who disclosed the bugs [Link]

  • B2C2 has won a case against Quoine over multimillion-dollar bitcoin trade reversal. Singapore’s Court of Appeal has ruled that Quoine must pay damages to B2C2 for wrongfully reversing seven trades on its platform. A B2C2 spokesperson told The Block: “We are pleased that the Supreme Court of Singapore confirmed that Quoine was in breach of contract when they reversed B2C2’s trades” [Link]

🎁 Startups Product & Partnership

  • Cryptocurrency exchange Bitfinex has allegedly paid back another $100m to Tether, thus now covering more than 20 % of its $700m loan facility they took last year. The stablecoin printer started to repay the loan in July 2019 by transferring $100m to Tether’s reserves [Source]

  • 2 crypto exchanges, Bitfinex & OKEx, go offline during DDOS attacks [Link]

  • European money transfer firm Azimo now uses XRP to settle select remittances [Link]

🏢 Corporates

  • UK cell service provider Vodafone includes Bitcoin in new ad, after exiting Libra project last month [Link]

  • Samsung-backed blockchain-based mobile app & voting ID system sees 1st commercial use, replacing key cards [Link]

  • Randstad, the world's largest human resources firm, has begun testing a combination of the Cypherium blockchain and Google Cloud to better match talent to corporate needs [Link]

  • On Feb. 25th, Boerse Stuttgart — the nation’s second-largest stock exchange — introduced an ETP that’s inversely correlated to Bitcoin swings [Link]

🏦Regulations / Universities

  • BaFin Says OMC Markets, VIVA EXCHANGE Unlawfully Target Germans [Link]

  • The Bank of England's chief cashier and director of notes, Sarah John, has said that it is "crucial" for central banks to research digital currencies before private companies dominate the space [Link]

  • Finland's customs agency has $15M in seized bitcoin. The agency seized the bitcoins years ago in a major drug bust, but hasn't cashed it out yet [Linkedin]

  • French blockchain security company NIGMA Conseil, and the Austrian Institute of Technology (AIT), signed an agreement to track crypto crime. The organizations will trace and chart blockchain connections and transactions, which addresses strict KYC rules, which also require tracking coin origins [Link]

💰Fundings & M&A

  • SIX Swiss Exchange announced Tuesday it has formed a partnership with San Francisco-based institutional solution Omniex to provide SIX and its subsidiary, Swiss Digital Exchange (SDX), with access to cryptocurrency markets [Link]

  • Blockchain firm AVA Labs acquired private investment platform Investery to further expand its operations [Link]

🏄 Events

About the author: Etienne used to head principal strategic investment (Companies, Funds and token investment) at Elwood, One of the largest European digital assets investment firm spun off of Brevan Howard, billion-dollar Macro Hedge fund. Previously, he was part of the founding team at the largest Capital Markets Venture Fund in London, Illuminate Financial