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The world of digital coins has been going distant from its inherent traits, as the industry is now more prone to economic activities around the globe. In the interim, protagonists from the crypto town break down events from the past year, for a thorough analysis of the market cycle.  What has been astonishing for the …

Budweiser extends its push into NFTs with a $394K profile picture, which it appears to have received in exchange for a Super Bowl spotlight.

The impact of Bitcoin on war will not simply be the eradication of violence, a problem of humanity since the dawn of time.

African gaming platform Carry1st has announced a $20 million Series A extension led by Andreessen Horowitz, with participation from Avenir and Google.

The post a16z leads $20 million investment into African gaming startup Carry1st appeared first on The Block.

It has long been said that imitation is the highest form of flattery. The rapid development of technology, shortening the production chains and product life cycle, new distribution models developed by the world’s largest corporations, the progressive shift of retail trade to the web, changes in consumer habits and the ever-increasing dominance of large internet platforms, meant that this sentence should now read: copying is the simplest form of theft. Radosław Krzycki , COO Skey Network According to one of the best current studies of this type, the OECD report on world trade and counterfeit goods, in 2019 the share of counterfeit products in global trade was 3.3% and was growing rapidly. In the European Union itself, the share of counterfeit goods was even higher and accounted for 6.8% of imports. Importantly, this number does not include counterfeits produced within the EU countries and their distribution via the Internet (so in reality it is probably much higher). According to the estimates of the ICC – the International Chamber of Commerce, the value of the trade in counterfeit products will increase to almost one trillion dollars in 2022, and the number of jobs lost will be between 4.2 and 5.4 million. More difficult to estimate is the size of counterfeit digital goods, which increases in direct proportion to the traffic and importance of the global network. In 2022, piracy of music, movies, series and software will cost up to $ 854 billion in losses. How do you stay authentic in a world that is becoming more and more artificial and repetitive? How to transfer quality, value and brand reputation from the physical to the digital world without losing the attributes of originality? The answer is provided by blockchain technology and its latest version – NFT – (non-fungible token). In short – it is a unique, inimitable piece of information stored in the blockchain data chain, constituting a kind of digital “tag” and a certificate that guarantees the originality of a non-physical product or work. With the help of NFT tokens, we can confirm that the product we have purchased comes from a legal source, was produced by exactly this company or a specific artist. Today, the real world is more and more often mixed with the digital world, and NFTs combine both dimensions. Let’s take an example product – a bag from a reputable manufacturer X. When you buy it in a store in a shopping center, you get a real product with a sewn-in tag, logo and barcode on the label. By applying the NFT technology to the sales process, the client, when purchasing a physical product, receives an additional, special code (e.g. QR), which gives him the right to have an equivalent of an exemplary bag in the digital world, with all the advantages – prestige, a certificate of originality, a value carrier or the right to resale. What are the advantages of this solution for companies? It is not only an effective method of fighting counterfeit and piracy, but the first step to the digital transformation of their brands and a smooth transition to the world of the metaverse, as well as gaining new markets and entering dynamically growing sales channels. An additional advantage is building the image of the company as modern, quickly adapting to changes and attractive for the youngest, technologically conscious consumer segment. It is worth emphasizing – this is not an investment dedicated only to premium brands, as evidenced by the movements of companies such as Nike, which bought the creator of NFTs and shoes existing only in virtual space. The mass use of this solution is only a matter of time. Probably in the near future, the authenticity of each product can be confirmed on the Internet by scanning its code / label. They will not only be a carrier of value (because who would not like to have shoes that never deteriorate, look like new and can always be sold), but a real source of income for their owners and creators. An example is the popular “skins” in computer games, that is, graphical modifications of the appearance of a character or part of their outfit. One of these skins in CS: GO recently sold for $ 150,000. What will the future hold? In Q3 2021, the NFT market exploded to $ 10.7 billion, up from just $ 1.3 billion in Q2. The vast majority of sales were made by NFTs from the “cheap” segment, ie those with prices between 0-100 and 100-1000 dollars. This confirms the thesis that the solution is universal for every company, not only those from the premium segment. As you can see, the entry threshold is rather low and the growth potential is very high. In entering this new, lucrative market, the key is to choose the right technology – the provider and type of blockchain on which we want to base our digital products. There are still relatively few companies with the appropriate know-how and experience in this field. To be successful, you need to act boldly, decisively, and most importantly – quickly, and grab the bull by the horns. Only more and more often it turns out that the bull does not have to be material …    

A Porter's respectful partial disagreement with another (unrelated) Porter on the idea of Bitcoin single-issue voters.

We’ve now entered the 46^th straight quarter of biotech IPO activity. New equity issuance for biotech in 2021 has broken records for the amount of capital raised, topping even the strong years of 2020 and 2014.

Although the open and constructive IPO environment continues,  the complexion of these newly-minted public companies is changing relative to earlier in the cycle:

• Younger and earlier. The median time from founding to IPO has gone from 10 years in 2013 to only 4 years in 2021. In the past seven quarters, more than 80% of IPOs were preclinical or Phase 1, nearly the inverse of a decade ago. These are young startups with mostly preclinical or biomarker (vs clinical endpoint) datasets.
• Richer but burning more. Balance sheets for new IPOs are larger than ever, and the median proceeds are up two-fold in the past few years (now $150-200M). Further, they are burning money faster than ever: at least 120 biotechs will burn over $100M this year, up from only 20 or so in 2016.
• More robustly valued. The median IPO valuation is up more than three-fold since the start of this secular bull market for going public: it was ~$150M a decade ago, and is now in the neighborhood of $500M.    

So “getting public” has never been as easy as it is today. 

It used to be the coveted prize, the “brass ring” to go for, which meant you’d made it in biotech. IPOs were considered “exits” and celebrated as rare once-in-a-career events. Today, in a world awash in capital, IPOs are just a step along the journey to bringing drugs to patients, and much more matter of fact steps, as well. They certainly aren’t exits, and, for many, their stage means that even the initial investment thesis has yet to play out (like showing value in a human PoC study, for instance).

For an R&D-heavy, loss-making part of the sector, getting access to the significant pool of public market capital greatly benefits emerging biotech. The dramatically lower cost of capital in the public markets (vs the private market with greedy VCs and their preferred stock) helps biotech startups scale more quickly.

But getting to an IPO is the easy part – being public is hard. 

With the incredibly expanding universe of public biotech names, fighting the crowd to get noticed by the best blue-chip investors is a never-ending struggle.

This is the essence of the “Relevancy Challenge” that many young companies face in their first few years as a public company: become a core position of one or more of the large “brand name” public investors, or get lost in the noise. Be compelling enough for marque investors to want to buy your stock.

Sadly, with this many newly minted public companies, many will find themselves asymptotically approaching, but never achieving, interesting “enough” to become such a core position.

This is what Josh Schimmer at Evercore ISI calls the “Like it, don’t love it” problem facing small and mid-cap biotechs today.  Lots of biotech names have cool technology or interesting drugs, just not cool or interesting enough. Telling a story that breaks through this problem – and becomes compelling enough – is critical for success as a newly-minted IPO.

A few other key lessons about being public from Schimmer, pulled from prior perspectives he wrote over the summer, are worth calling out, including some verbatim quotes:

1. Don’t rest on your laurels as a “successful” IPO. IPOs aren’t the end of the game, or the brass ring noted above, that they once were. You have to keep the fire lit – your first few years running as a public company should almost certainly be more intense than your last two as a private company. “Be aggressive. Hungry teams win”. Don’t cut corners, and do focus on high integrity R&D, but don’t let the team just dream away their mandate to deliver. And don’t let the stock price distract from being hungry; lots of in-the-money options can make teams complacent. “Especially in competitive fields, companies which don’t bring a hunger to move quickly and methodically are at risk of losing investor support”
2. Be disciplined on spending. Or “Don’t be frivolous” in Schimmer’s words.  Burn rates are way up in these markets, which is great for advancing programs but can turn against you with delays and challenges; fixed costs like FTEs and expenses leases can eat into runway quickly. Be adaptable, flexible – and where you can, keep costs variable so you can dial down quickly if need be.
3. Raising money under duress is very hard. Even in “hot” markets, hiccups in R&D can quickly make the cost of capital skyrocket.  Hiccups could be as bad as failed trials, but can also just be delays, noisy data, or even good/bad competitor news. During challenges, stock volatility can make raising even modest amounts of capital incredibly dilutive, transferring future returns from the existing shareholders who helped get you here to new ones taking advantage of the opportunity. As an earlier stage investor, I obviously hate it when this happens.
4. “Easy to fall, hard to recover”.  Gravity in biotech is a constant force, and as my blog tagline says, I consider myself “a biotech optimist fighting gravity.” It’s the constant force that tries to bring valuations lower, and companies have to tirelessly fight against it. Lofty valuations can drop quickly back to earth with bad news, or it can just be the steady gravitational pull of no news at all. Further, once you fall, it’s often hard to recover the mojo in the face of this gravity. Reputation, credibility, and sentiment are all inter-related. Very few “get out of jail free” cards exist in the biotech stock market. High-fliers that blew up because of perceived “bad” management choices can take eons to recover, even with strong data performance, because of team questions. The best answer is never to fall… but that’s a near impossibility over the life of a biotech, so learning how to bounce with a recovery is key.

When I’ve had portfolio companies go public, I often like to remind them – even if the stock popped on the first day – that we’ll very likely go below $10 before we go above $100. Volatility in the journey as a public company is just a ubiquitous feature of the sector.  We also like to say “it’s not a price if you don’t sell” – so if you don’t have to issue stock (or trade) than don’t focus on the day-to-day stock movements. The vast majority of biotechs break their IPO issue price at some point. But the hope is that you can raise capital at steadily higher prices (and valuations) over time to advance the pipeline and accrete value to the business.

To the 150 companies that are less than two years old in the public markets, look to your left and right… who will be the #456’s in the “squid game” of the public markets? Sadly, if history is any indication, many of these companies aren’t likely to have won the public market “relevancy challenge” when we look back 5-10 years from now.  It’s really hard being a public company – so good luck out there!

Technologies that were state of the art 50 years ago will be usurped by Bitcoin as the superior technology makes itself apparent.

Earlier this month, Fidelity Digital Assets, a division of Fidelity Investments, released a report on cryptocurrency developments and their possible future implications. The adoption of cryptocurrencies by sovereign nations is one of the topics covered in the paper.  “This past year saw some major moves by world governments with regards to digital assets,” Fidelity described. The report discusses countries like China that have banned cryptocurrency and countries like El Salvador that took the opposite approach and made BTC legal tender. “We think the two developments observed this year couldn’t be more opposed. Time will certainly tell which path is more successful,” the report authors discoursed. Though, they noted: “An outright ban will be difficult to achieve at best, and if successful, will lead to a significant loss of wealth and opportunity.” The authors continued, “We also think there is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers,” expounding: “Therefore, even if other countries do not believe in the investment thesis or adoption of bitcoin, they will be forced to acquire some as a form of insurance.” Fidelity illuminated, “In other words, a small cost can be paid today as a hedge compared to a potentially much larger cost years in the future.” The investment firm established: “We, therefore, wouldn’t be surprised to see other sovereign nation states acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition.” Last week, El Salvador’s president, Nayib Bukele, projected that two more sovereign countries would embrace bitcoin as legal cash this year. Nigel Green, the CEO of deVere Group, is more positive. Three more nations are expected to embrace BTC as legal cash this year, according to him.

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Fidelity Digital Assets, a subsidiary of Fidelity Investments, published a report earlier this month on crypto trends and their potential future impact. Among the trends discussed in the report is cryptocurrency adoption by sovereign nations. This past year saw some major moves by world governments with regards to digital assets,” Fidelity described. The firm expects […]

Financial services giant Fidelity says that more nations will buy Bitcoin (BTC) this year to remain competitive. In a new report, strategists at the firm say that a high-stakes form of game theory is in play and countries who don’t adopt the top crypto asset by market cap early could fall behind their peers. “If […]

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