Firsts are always special — and hard. They blaze the trail, and before you know it’s normal. Think about the first company that went public (scroll down to find out!). The concept of having external part owners that you don’t know was alien once but isn't so surprising anymore. Here are the firsts we saw around us, recently.
Proshares, one of the largest ETF providers, launched a new ETF this week. What’s new? It is the first bitcoin futures based strategy. The ETF does not own bitcoins, it instead mirrors the performance of the futures on Bitcoin. Interestingly, it raised USD 1 billion in just 2 days, and has almost reached the limit of futures contracts it can own!
US investors have had access to private bitcoin trusts such as the Grayscale, which has grown to USD 37 billion in assets since launch in 2013, indicating the appetite for the cryptocurrency in the US. And almost 50 crypto ETPs are now up and running worldwide with combined assets of USD 14 billion.
- ETF with actual bitcoin underlying might have liquidity issues, risk of price manipulation and owning the digital currency with the key might be a challenge
- ETF with bitcoin futures underlying, might be expensive due to the contango effect and the associated roll over costs
This might be just the start, SEC and other regulators worldwide might soon give a nod to more crypto oriented offerings. What becomes important amidst these developments, is to impart education (say, how futures are different from spot products) to the users, especially when we are in an era of wealth-tech platforms, where access to these is very easy.
Would you like to take exposure to a Future based Bitcoin ETF, if given a chance?
While globally, there are many international sports leagues like Manchester United with a billion dollar valuation, India is about to get its first one. Led by their recent win in IPL 14, CSK is all set to become the first sports unicorn in India.
The unlisted CSK stock has rallied almost 10 times in the past 3 years. Further, with two more teams getting added for IPL 2022, CSK’s profit making franchise definitely has an edge. It reported a PAT of Rs. 40 Crores in 2020-21.
- Consistency: they have won 60% of the matches played so far
- Strong brand value backed by the names like MS Dhoni and India Cement
- Loyal fan base leading to superior ticket and merchandising sales
Many private equity firms and HNIs have invested in sports leagues worldwide, with a view to monetize the loyalty of the fans. India is now at the cusp of such opportunities being available. Ensuring corporate governance in such businesses is more critical than ever if they are to stand the scrutiny of investors.
Metaverse, an interconnected virtual world, is regarded as the next revolution in the internet. Facebook announced a recruitment drive of 10,000 jobs in Europe to bring metaverse to life. The first mover in the metaverse talent war!
Experts believe the size of the metaverse economy could be 10 times the size of the current global economy. For reference, at present, the global economy stands at USD 94 trillion.
- Individuals would have their virtual avatars for socializing
- Blockchain and NFTs will be at the center of the transformation
- Policing around data privacy, carbon footprint or frauds would be an important aspect
Creating their forms of metaverse would be left to the crazy innovative streak of the big tech players. The ones who would best simulate the real world and make this transition into the virtual world smooth would have the initial monopoly. Bizarre as it sounds, we will need to track investment opportunities in this new world.
There’s always a first time — including when to bring discipline to your portfolios. At dezerv., our experts use the Integrated Portfolio ApproachTM, which rethinks the investing process through a systematic approach and gives you the unique portfolio solutions that your money deserves.
So, a lot of firsts playing out around us! By the way, the first publicly traded company was the Dutch East India Company in 1611 and for many following years, it was the only company with trading activity on the Amsterdam stock exchange. Today, there are over 41,000 listed companies in the world!
This got me thinking — when was the last time we did something for the first time?