Fifth Era/Blockchain Coinvestors Update #16

In recent days we have been asked several times over whether the current pandemic crisis is a good or bad one in terms of equity investing in Fintech and Blockchain businesses. This is a complicated question to answer in the short term, but we think it is easier to answer if you take a longer term view. Here are our thoughts for the 3 to 5 year timeframe:

1. Acceleration into the Future. The underlying adoption curves of the future digital economy (The Fifth Era) that we are transitioning to just steepened sharply as the world had no choice but to embrace virtual work, education, play and so on. Silicon Angle has a very good article by Paul Gillin that summarizes the broad strokes of this acceleration, and we encourage you to read it here. Across the Blockchain Coinvestors combined portfolio, the impact on companies is clearly not all positive, however, we are seeing record traffic, revenue, trading volume and so on being reported by fintech companies focused on digital payments, wallets, exchanges, and so on (admittedly this anecdotal information).

2. Public Market Response. The public markets have reflected this sentiment as investors have bid up the potential digital beneficiaries, and bid down the old world players. In the financial services arena, we are seeing public market investors beginning to discriminate between who they believe will benefit from the transition to a fully digital world and those who will not. Jeff Dorman of Arca puts it succinctly with the following quote and chart:

As Howard Lindzon said, ‘People say markets can’t move higher without the financials (banks) but maybe the new "banks" are what matter more.’ He may be onto something. Below are the market caps of new finance companies compared to old finance.

3. Private Market Expectations. Private markets will take longer to adjust. However, Harvard professor Josh Lerner reports that venture capital is one of the few asset classes that does better following major financial crises, as his chart reproduced here shows.

So putting together these three points, we have to conclude that painful as it is for all of us to live through, and tragic as the personal outcomes are for many people around the world, this pandemic is doing nothing to change our minds. 

It is still a very good time to be an early stage Internet, Fintech and Blockchain investor.

Free ebook - The Fifth Era

Please accept our free book which details the nature of the transition the world is passing through, and forms the first part of our best selling books, Build your Fortune in the Fifth Era and Corporate Innovation in the Fifth Era. Click here to download: https://www.fifthera.com/ebook
 
Upcoming Webinars

Please join us for an upcoming webinar by clicking on any of the following links:  

Investing In the Top Distressed Asset Managers - June 8th, 7am PST
Investing In the Top Distressed Asset Managers - June 8th, 12pm PST

Meet the Blockchain VCs - June 22nd, 7am PST
Meet the Blockchain VCs - June 22nd, 12pm PST

Our webinar library can now be found at www.fifthera.com/webinars.

Upcoming Events

Tomorrow, June 2nd - Global Investor Conference: Women Owned Businesses Thriving During Covid-19 

Linqto presents a day-long, virtual conference that this month focuses on women-led businesses that are thriving during the pandemic. Register now to learn more about 16 companies and funds making a difference as attractive investment opportunities helping us get through this crisis. Use promo code "BC100" at checkout for a registration discount. 

Recent Appearances

Please use the links below to access our most recent webinar and podcast appearances:

  • We recently posted our popular Blockchain Coinvestors webinar on Family Office Blockchain Exposure at www.fifthera.com/webinars.

  • At the last Virtual Investor Conference, Matthew Le Merle had the opportunity - and pleasure - of interviewing Greg Kidd about early stage investing. Greg was an early investor and founder at Twitter, Square, Ripple, Coinbase, Robinhood, Uphold, Linqto and many others. Check out the virtual fireside chat to learn more about the best strategies to get in early.

  • Matt Walsh and Nic Carter are the General Partners of Castle Island which is one of our funds and is also backed by Fidelity and Highland Capital. They recently interviewed us for their own blockchain podcast series.

  • Stephanie Christopher, CEO at The Executive Connection (TEC), sat down with us to walk through the future of the digital economy in her podcast TEC Live - Business Leadership Insights.


    Learn More

Also visit us at www.fifthera.com and www.blockchaincoinvestors. com to find more information and request our investor materials.


We thank you once again for your support, and we hope that in this challenging time you and your family and loved ones are staying safe and healthy. 

Best wishes,

Alison Davis
Matthew C. Le Merle

Matthew Le Merle