Cracking the Code: Advisors Dive into Web3 Crypto Investments

• The Transition to Web3: A New Era of Internet Evolution
• Accessing Web3 Investments via the Stock Market
• Public Markets and Web3 Opportunities
• Crypto Asset Exposure and Token Adoption by Enterprises
• The Expert's View on NFTs
• Trends to Watch

The Transition to Web3: A New Era of Internet Evolution

The landscape of technology is continually changing, with emerging solutions such as blockchain, machine learning, and AI set to influence the next stage of internet development, widely known as Web3. This week, we delve into the insights of Alex Tapscott, author of the groundbreaking book Web3: Charting the Internet's Next Economic and Cultural Frontier. He discusses the progression of the Internet and how it opens new investment opportunities. As stated by Sir Tim Berners-Lee, the inventor of the World Wide Web, Web 3.0 is the next phase of the Internet.

Accessing Web3 Investments via the Stock Market

Innovations often seem like sudden success stories to those unfamiliar with new technologies. However, they are typically decades in the making. Currently, four transformative technologies are simultaneously peaking: blockchains, AI, the internet of things (IoT), and extended reality. These technologies are intersecting and complementary, much like how the term 'internet' evolved from denoting a restricted set of technologies to embracing a plethora of technologies, business models, cultural shifts, and social transformations. Similarly, Web3 will define the upcoming era of progress.

Investors and advisors are exploring ways to gain exposure to these disruptive technologies. The rise of Web3 demands a fresh perspective on the markets, much like the initial stages of the web in the 90s. The question arises: can investors gain exposure to Web3 through stock purchases?

Public Markets and Web3 Opportunities

The answer, we find, is affirmative. Today, numerous companies are using the Web3 toolkit to develop innovative products and services, reach new customer bases, and unlock new potentials. US dollar stablecoins, for instance, are predicted to become widespread payment tools, with companies such as PayPal launching their own stablecoins.

Stablecoin economics are profitable, with issuers investing deposits into U.S. government debt, yielding 4-5%. The potential growth of the stablecoin market could reach $200 billion in 2024, with PYSD potentially reaching up to $5 billion. Additionally, Circle, a highly innovative global financial technology firm with its popular stablecoin USDC, is contemplating its own public offering.

Crypto Asset Exposure and Token Adoption by Enterprises

The Expert's View on NFTs

A NFT (Non-Fungible Token) is a unique, indivisible tokenized record of ownership that is verified using a blockchain. Unlike other blockchain-based tokens, NFTs are non-fungible, meaning they cannot be directly substituted by another of the same type. They can represent ownership of any digital or physical asset, intellectual property or rights, and their key features make them incredibly useful in today's digital age.

Trends to Watch

British investment managers have been given approval to tokenize funds, potentially offering lower cost and transparent trading. Crypto spot ETF approvals could lead to a $70 billion influx, according to recent analysis. However, Binance continues to face scrutiny from the Securities and Exchange Commission.

Edited by Jonathan Stoker