This Week in Fintech ending 9 October 2020

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This week our experts brought you the following insights based on their experience as investors, entrepreneurs & executives.

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Your Editor is Bernard Lunn. He is also the CEO of Daily Fintech and author of The Blockchain Economy and occasional opinion columnist.

Monday Ilias Hatzis our Greece-based crypto entrepreneur (Founder & CEO at Mercato Blockchain Corporation AG and Weekly Columnist at Daily Fintech) @iliashatzis wrote The (key)less to mass adoption

While cryptocurrencies have picked up a lot of steam, there are serious obstacles in the road ahead. Security remains an ongoing problem. Since 2011, hacks and thefts of digital assets have resulted in at least $9.8 billion in losses. From Binance and Bitpoint to Bithumb and Electrum, malicious actors targeted both small and large wallets. And despite companies improving their technologies, security problems are only getting worse.

Editor note: Long private keys are essential to crypto security but who outside the early adopters uses them properly?

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Avoid the stock market casino by doing real company analysis

Fred Schwed was a professional trader who wrote Where Are the Customers’ Yachts? after losing a bundle in the 1929 stock market crash.

Maybe the modern equivalent of  Fred Schwed, having lost a bundle trading on zero fee brokerage systems, is today penning an expose of the worst shenanigans in the the stock market – using candlelight because his/her electricity has been cut off for non-payment!

People used to actually fund their retirement and kid’s education by diligently researching the fundamentals of a company and buying the company’s equity on the stock market. Warren Buffet did this so spectacularly well that he has also funded the retirement and kid’s education of many generations. Buffet is NOT a lone outlier; thousands did the same thing on a much smaller scale, researching the stocks of companies that made products that they liked and buying the company’s equity when it was fairly valued or cheap.

Editor note: This post is going to be unpopular. Nobody likes to be told that hard work and patience is needed. 

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Tuesday Efi Pylarinou @efipm our Swiss-based Fintech Adviser,  founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019 wrote Spotlight on the Bakkt App

It is Autumn and a warm color mix of red, green, and yellow in trees, is surrounding us. When you are not on a zoom call or on social media, look outside because it won’t last long.

In Fintech land there are politics and banking creating heated discussions. And there is another `trend` to highlight: Several innovative Fintechs are closing the gap between institutional and retail financial offerings. I am not referring to Fintechs that offer services that were inaccessible to retail 5 to 10 yrs ago. I am highlighting Fintechs that are focused both on serving institutional or business needs and also retail needs. Fintechs that have decided to grow both and create unique ecosystems.

Square is one example with its core offering for merchants that is built around its square hardware for payments at point of sale, and a growing software suite. And it`s Cash App for end-consumers. Coinbase is another one, with its institutional suite for trading cryptocurrencies and its landmark retail Coinbase app. Both of these examples are fairly seasoned companies. Square was launched 11yrs ago and is already public (since 2015) and Coinbase is 8yrs old and close to going public even though it does not need it ($547million funding and a valuation of $8B).

Another one that I want to highlight is much younger and upcoming. Bakkt was founded in 2018 and is part of the Intercontinental Exchange (ICE). It has raised $482million already (Series B was $300million in March 2020) and has a valuation just over $1billion.

Editor note:Fascinating look at the intersection of institutional finance, crypto and gaming.

Wednesday Alan Scott Managing Director EMEA at 24 Exchange @Alan_SmartMoney wrote Stablecoin News for the week ending Wednesday 7 October 2020.

This weekly snapshot is the news that matters in the Stablecoin market.

Bernard Lunn, CEO of Daily Fintech and author of The Blockchain Economy wrote: Seven to Ten Years may not be correct for bootstrapped ventures

I am commenting on this superb post by Fred Wilson, the VC posting in AVC. I am often using the data in my posts. It is very valuable data (and fascinating to data nerds such as myself). The TLDR summary:

“It takes seven to ten years to get to real liquidity in a portfolio of early stage venture investments. You can’t short cut it. It just takes time. But come years seven, eight, nine, and ten the returns will start coming in.”

Comments are closed on this AVC post so I am commenting by linking from my post to his.

There is a a quibble. Some rocket ship ventures get there in 5 years. Think Facebook and in Fintech maybe Revolut. However those exceptions prove the rule and even if Facebook got profitable in 5 years, it took until year 8 before it was “minting money” ie it entered its prime CAP (Competitive Advantage Period) years. However the missing perspective addressed by this post is that of the bootstrapping entrepreneur.

Editor note: Continuing the theme of patience from Monday, this time from the perspective of the entrepreneur.

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Thursday

Rintu Patnaik, an Insurtech expert based in India, wrote: Mobility Giants Gear Up To Enter Insurance Fast Lane

In April 2019, Ford Motors created a new division representing multiple lines, including micro-mobility, non-emergency medical transport and city solutions. General Motors, a 110 year old company, rebranded as General Mobility offering services in real-time vehicle diagnostics, dealer notification and driver scoring to improve performance.

Emerging trends in automotive industry allude to a future of connected, autonomous, shared and electric mobility and are poised to alter the auto insurance industry as we know it. A fourth of motor premium is forecast to shift to these new domains in the next decade.

Editor note: If you want to understand the forces driving the future of auto insurance, read this post.

Christian Dreyer @x3er, our Swiss based CFA who focusses on how XBRL changes our world wrote XBRL News: EU Single Access Point, SASB goes XBRL and ISDA standardisation

Editor note: This weekly snapshot is the news that matters in the XBRL market.

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Friday Howard Tolman, a well-known banker, technologist and entrepreneur in London. wrote:Alt Finance week ended 9th October 2020

Editor note: This weekly snapshot is the news that matters in the Alt Lending market.

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