I opened the storage closet… And where there used to be stacks of printer paper, there were now a dozen small computers zip-tied to the storage racks.
It looked something like this…
Credit: Xiangfu, via Wikimedia Commons
That’s when I realized my boss was running a secret underground bitcoin mining operation.
In 2017, I was studying for my master’s degree in finance.
To pay the bills and learn a bit more about the industry, I took a job as an assistant for a financial adviser in a small Midwestern town.
It was December, and everyone was talking about bitcoin. The price was up 920% since the start of the year. But there was no way for financial institutions to get a cut.
That didn’t stop my boss from trying.
When clients who were curious about investing in bitcoin reached out to him, he thought he had a clever plan.
He took their money… put it in an obscure crypto exchange… and bought some bitcoin.
The timing couldn’t have been worse.
Just a few weeks later, the market turned. And by the end of January 2018, bitcoin had plunged 50% from its highs set in December 2017.
That’s when I stumbled upon the bitcoin mining rigs in the storage closet…
I shut the door, went over to a colleague, and asked him what was going on.
“They’re mining bitcoin,” he told me. “They lost access to the clients’ funds.”
Here’s what happened…
The exchange told my boss that if he wanted to retrieve his clients’ funds… He’d need to deposit more bitcoin on the exchange. Then they’d release the funds and the deposit “in a few months.”
This is when the alarm bells started going off in my head.
I couldn’t believe clients in their 60s and 70s were risking their hard-earned money on these obscure platforms. It seemed irresponsible and reckless.
I quit my job later that week.
Here’s why I’m telling you this story…
Whether it’s a big-time firm on Wall Street or your hometown adviser on Main Street… All financial advisers want the same thing…
A cut of the hottest asset in the world right now: bitcoin.
Not only is investing in bitcoin a great way for them to earn more commissions… If they can’t invest on behalf of their clients, those clients will find someone else who can.
Back in 2017, it was difficult for asset managers to find a safe and simple way to invest in bitcoin on behalf of their clients.
They had to rely on shady exchanges – like my former boss did.
That’s a recipe for disaster… as I’m sure my boss’s clients eventually figured out.
But all that’s about to change.
That’s because every financial adviser in the country – from the top firms on Wall Street to the small-town financial advisers – will have a better way to get exposure to bitcoin.
A Simpler Way to Invest in Crypto
If you’re a longtime Daily reader, you probably know I’m referring to a spot bitcoin exchange-traded fund (ETF).
ETFs trade on exchanges and track an asset or a basket of assets. They’re great investment vehicles because they make it easy to buy or sell an asset that can otherwise be difficult to.
Currently, the U.S. Securities and Exchange Commission (SEC) is reviewing 13 applications for spot bitcoin ETFs.
These names include Wall Street titans BlackRock, Fidelity, and Invesco. Combined, they have $15 trillion in assets under management.
According to ETF analysts from Bloomberg, there’s a 90% chance of spot ETF approval by January 10.
That’s the final deadline for the SEC to decide whether to accept or reject a spot bitcoin application from Ark Invest. The SEC can’t postpone the decision any longer.
Once the giants of Wall Street can profit from bitcoin and other cryptos, financial advisers will be given the green light to allocate client funds to the assets.
They won’t have to worry about custody solutions or how they can collect their fat 1–2% asset management fee like my former boss did.
The approval of these ETFs will open the floodgates of capital into bitcoin…
Blockchain data firm Glassnode estimates that up to $70 billion in new capital could flow into bitcoin after the approval of a spot bitcoin ETF.
While this is great news for bitcoin, asset managers won’t just stop there. They’re already eying the ETFs for the second largest crypto, Ethereum.
Just last month, BlackRock, Fidelity, and Invesco filed for a spot Ethereum ETF.
That will open the door to ETFs for other major cryptos… Just like the launch of the SPDR Gold Shares ETF paved the way for silver, oil, natural gas, and copper ETFs.
And the market is betting these spot ETFs will get approved soon.
That’s why bitcoin and Ethereum are up 69% and 44%, respectively, over the past three months… with no signs of slowing down.
But while the mainstream media is focused on the approval of a spot bitcoin ETF… It’s completely missing a trend that could be 117x bigger.
The $100 Trillion Opportunity
The trend I’m referring to is the tokenization of real-world assets (RWAs). It’s a topic Daily editor Teeka Tiwari has been pounding the drum on for years.
You see, we believe every asset will be tokenized.
That means stocks, bonds, titles of ownership, real estate, music rights, collectibles – everything of value – will have their ownership rights secured by a blockchain.
Anyone will be able to trade the rights to assets they own to anyone else anywhere in the world at any time – all with the click of a mouse.
And this isn’t just pie-in-the sky thinking…
A recent survey by banking giant BNY Mellon found 97% of institutional investors agreed that tokenization stands to revolutionize asset management.
According to Reuters, there’s over $100 trillion in assets in the U.S. alone. That’s 117x bigger than bitcoin.
And a new venture will be the catalyst for it.
It’s called EDX Markets.
EDX is a digital asset exchange that launched in June 2023. It allows financial and crypto-native firms to trade digital assets.
The venture is led by Sequoia Capital, the firm behind startups like Google, Apple, Cisco, Instagram, PayPal, YouTube, and Airbnb.
It’s also backed by some of Wall Street’s biggest financial firms, including Charles Schwab and Fidelity. And it’ll be run by former executives from CME Group, Citadel Securities, and Goldman Sachs.
The launch of EDX is a big deal because it’ll be an institutional-grade trading desk that all of Wall Street can use.
We believe EDX will be the bridge that connects these tokenized assets to the markets.
And that’s where our opportunity lies…
These incumbent financial institutions are NOT going to rebuild capital markets themselves. They don’t have the expertise for that.
They’ll have to collaborate with existing blockchain technology platforms. And that’s where we come in.
Last week, Teeka held a special strategy session to share details about five coins he believes will ride this wave to new heights.
He also revealed the name of a token we believe could potentially 8x your money as the tokenization trend plays out.
You can stream the replay right here.
We’ve come a long way since the days of financial advisers like my old boss investing their clients’ money on shady crypto exchanges… or using their money to run secret bitcoin mining operations.
EDX will provide an institutional-grade trading desk that any Main Street or Wall Street financial adviser can use. And potentially generate billions in fees along the way.
Don’t miss the opportunity to get into this trend before everyone else awakens to it. By then, it’ll be too late.
Regards,
Houston Molnar
Analyst, Palm Beach Daily