Why the crypto winter and the FTX meltdown are not really consequential for the security token industry
If you are a top-notch specialist in all the nuances of the crypto and token market, don’t waste your valuable time reading this. But if you – like most of us – sometimes get confused about whether and how incidents in one part of the space can influence another part, this may be relevant to you.
What just ten years ago was a relatively simple and homogeneous space populated only by Bitcoin and a small number of altcoins today has grown highly multifarious. Actually, it’s a stretch to even talk about one space anymore since the qualitative differences in technologies, solutions, strategies, and visions have grown too big, and the actors (companies and people) in different parts of the space are living and breathing in separated ecosystems to the degree that you might talk about different industries.
Two examples that I am particularly interested in here are cryptocurrencies and security tokens. To what extent do they represent separate sub-spaces and industries with separate markets, market players, and types of clients? The answer is: To a very large extent. And to what extent are the two sub-spaces interconnected in the sense that an event in one part has a direct consequence in the other part? To a fairly low extent – OR…?
Historically, they both go back to Nakamoto’s whitepaper and the development of the underlying blockchain technology. But while cryptocurrencies are still these rather odd creatures born as decentralised peer-to-peer payment solutions that eventually turned into a highly volatile non-backed, partly unregulated asset class, security tokens are totally different.
The security token is the neat and tidy, slightly boring boy scout of the tokens that always takes pride in being regulated and compliant. No attempt here to fly under the regulatory radar. On the contrary, the security token was born out of the very need for…
