Investing in real estate portfolios, private equity firms and other non-public corporate enterprises has typically been the exclusive domain of asset and wealth managers whose clients have £100,000 or more to put in. But the security of blockchain technology and the reliability of distributed ledgers mean investments can easily be broken into smaller chunks, offering opportunities to everyone. Anyone with as little as £200 can now invest in assets that were beyond reach.
This technological shift has meant thousands of companies have created virtual tokens to build their own investment vehicles and quickly raise capital. Many are offering cryptocurrency coins through an initial coin offering (ICO), rather like a form of corporate debt, and beginning to raise capital from a wide variety of investors on a global basis.
However, investors in these ICOs face myriad options. Many of the new investors may not be familiar with corporate due diligence processes or know how to check and understand what they are investing in.
A new breed of companies is using the benefits of cryptocurrency to change this. One cryptocurrency is BDXcoin, born out of the skillsets of foreign exchange and futures trading firm BDSwiss. It has created a “master coin” or purchasable token that can be used to buy services and trade within the BDX ecosystem, comprised of an ICO platform and crypto exchange, for zero fees.
Every time an ICO is launched on the platform or a token is listed on the crypto exchange, BDXcoin holders receive additional tokens from those companies as a reward. To guarantee the quality of investment, BDXcoin employs its own assessment and has rejected nearly 92 per cent of ICO applications. In its review, it evaluates five factors: the founders and their prior accomplishments, if there is a credible need for blockchain, the way the token is designed, the business plan and market fit.
“We’ve been able to “tokenise” investment, meaning anyone can buy our tokens and receive the rewards of our ecosystem,” explains Dennis Uitz, co-founder of the company. BDXcoin currently has coin issues from 11 different firms in its portfolio and there is an ongoing queue being further assessed before launching.
These white-labelled ICOs include one from a real estate developer with €200 million of assets in Germany. Another is from a travel and leisure gift card company, the largest in the Austrian market, and a third issue involves an established Tunisian company developing the first African Formula 1 racetrack.
Perhaps the most cutting-edge issue is in the private equity space, which is typically off limits for all but institutional investors. The company involved is a German private equity house typically returning more than 18 per cent per annum to its investors, looking to significantly broaden its capital base by tokenising products.
Mr Uitz says blockchain technology and cryptocurrency models open up investment opportunities, but adds: “Investors can see from the huge range of coin issues out there that our evaluations are key to a good investment.
“With so many options, investors need a quality due diligence process, and institutional quality investment that will stand up to regulatory scrutiny and create proper returns. That’s why we’re applying investment-banking level due diligence across the ICO opportunities we review.”
More than 3,000 investors already own BDXcoin tokens and millions more potential clients are beginning to examine cryptocurrency options. There is clearly huge scope for the right businesses to list coins and raise capital. Protected by proper due diligence, investors have an enormous opportunity to invest any amount of money in strong teams and organisations.
To find out how to take advantage of blockchain technology for accessible, high-quality investments please visit bdxcoin.com