Large Capital Inflows, Stablecoins, Mega M&A, Bitcoin, & AI Too
Large Capital Inflows, Stablecoins, Mega M&A, Bitcoin, & AI Too
Sometimes it is hard to choose just one topic for our newsletters. There is simply so much happening now around Digital Finance, Blockchain, Bitcoin and the rapidly converging themes of AI, Agents, and so on. Subject matter that we have focused on for decades, and which we wrote about in our earlier books including the two shown above.
So today's newsletter is more of a smorgasbord of important and value accelerating topics than a single thematic.
By the end, we will both encourage you to continue to ask us about our Blockchain investment strategies, and...
...you reach out if you're interested in how we’re thinking about the future of Intelligence and Computing, particularly developments in AI and autonomous agents.
While we can’t share specifics here, feel free to email us at IR@BlockchainCoinvestors.com.
LARGE CAPITAL FLOWS IN MOTION
We watched this week's visit by the US president and administration to the Middle East with great interest.
Our biggest takeaways - vast capital flows are now in motion behind the world of exponential technologies. While the focus was more on AI, Compute, and Aerospace and Defense, Blockchain and Crypto picked up their share of support too. That created some controversy, not least because the sons of the US President are all in on Blockchain and Crypto and are themselves moving billions of dollars in initiative after initiative.
Over a trillion dollars in less than five days committed to coming to America. Pretty remarkable and the tip of the iceberg we believe.
As we have said before, digitalization is now upon us, and all of the world's economic activity is being brought online. As regards the intersection of the future of Intelligence and Computing, and the future of Digital Finance and Blockchain, we are increasingly of the opinion that we need more exposure to both:
We continue to invest more behind our Blockchain investment thesis
We need to allocate and place more capital into the AI investment thesis
As a result, we have spent this year figuring out what AI exposure we already have, and what more exposure we need and how to get it.
We are ready to share our answers to you, so please contact IR@BlockchainCoinvestors.com if you would like to know about how to get diversified, early stage, AI exposure.
All of this is good for our blockchain investment thesis: the digitalization of monies, commodities, and assets requires blockchain infrastructure, and the world's leading payment companies know that AI and the Agentic revolution requires microtransactions which they currently can't support, as the next story makes clear.
STABLECOINS ARE GOING MAINSTREAM
Over the years we have talked a lot about how today's payment system is unfit for purpose for a digital age. We have used in the past the specific example of MasterCard and Visa being unable to support small and micro transactions on their legacy payment networks. The big issue is that the future will be driven by small and micropayments. Not least because AI and Agents will be doing human to computer and computer to computer transactions at small units per transaction but massive volume in the trillions and trillions.
This requires that MasterCard and Visa find ways to complement their legacy solutions, and eventually a way to migrate onto a new Internet native way to support global payment activity.
So it is no surprise to us that MasterCard just announced a global partnership with Moonpay to provide stablecoin access everywhere MasterCard is available, which is in 200 countries.
The implications could not be more profound. Stablecoins are going mainstream, and by their actions, MasterCard (and Visa) are announcing that the future of payments is natively digital and built on stablecoin and blockchain rails.
MEGA BLOCKCHAIN MERGERS AND ACQUISITIONS BEGINNING
It is not only MasterCard that sees the future clearly now. The leading blockchain native companies are seeing the inflection point, and their boards are approving mega mergers and acquisitions to make sure they keep scaling as well as building out their scope with important expansions of customers, products, and services.
In just the last few weeks we have seen announcement after announcement. A veritable new golden age of blockchain M&A.
Needless to say, we believe our funds are well-positioned to see a positive impact from these, and the many more acquisitions in process.
Exits drive distributions, which is important for all of us to be able to recycle our capital into the next wave of innovation.
BITCOIN TREASURIES GETTING EVER LARGER
Bitcoin too is seeing a scaling up of the scale and scope of capital market activity. Just as one example, our partners Cantor Fitzgerald announced a new deSPAC merger with 21 Capital (XXI).
This announcement will - at completion - create one of the top 3 Bitcoin treasuries in the world. Portfolio company Tether, and SoftBank are big backers and on completion 21 Capital will go public with 42,000 Bitcoin in its treasury
That's $4.2 billion at today's price.
The public markets have few companies in total, and very few which can boast multi billion dollar market capitalization, and the prospect of rapid growth.
21 Capital is hoping to deliver both.
GLOBAL, DIVERSIFIED ACCESS
All of the above stories are music to our ears.
Our investment thesis still holds. Indicators suggest our blockchain investment strategies are performing in line with expectations. Just as we identified with blockchain technology, we know we have to find more AI exposure now to achieve benefits in the future (contact IR@BlockchainCoinvestors.com to learn more) and we see the dramatic scaling up of Stablecoins, the opening up of mega M&A in blockchain, and the increased interest in Bitcoin in public markets all as examples of the inflection in growth and value that is taking place.
We also just completed our biannual assessment of our combined portfolio, which consists of the totality of blockchain companies and projects that we have indirect or direct exposure to across all of our funds and investment vehicles. Some metrics you will find of interest (although know that it is hard to be exactly accurate for various reasons):
Total Number of Deals Participated in - 3167
Number of Portfolio Companies (Indirect and Direct) - 1523
Number of HQ Countries - 65 (excluding decentralized)
Unique Venture Funds in which we are Partners - More than 50
Distribution - Investment Theme:
Application Layer - 44%
Transactional Layer - 31%
Foundational Layer - 25%
Distribution - Investment Stage:
Series A or Earlier - 72%
Series B or Later - 20%
Warrants - 6%
Others - 2%
Distribution - Location:
North America - 63%
EMEA - 20%
Asia - 13%
Decentralized - 4%
If you are an investor with us, we don't believe there is any other way to get the global, diversified exposure in early stage blockchain ventures backed by our leading blockchain ventures funds.
Now we need to replicate that for AI.
IMPLICATIONS FOR INVESTORS
Please reach out to us to hear more about this new acceleration in Digital Finance and Blockchain. Now we are working to provide similar access into AI and the Future of Intelligence and Computing so please ask about that too.
If you want to learn more about our investment strategies, please just contact us at IR@BlockchainCoinvestors.com.
Thank you for reading,
The Blockchain Coinvestors Partners
About Blockchain Coinvestors
Blockchain Coinvestors invests in blockchain businesses. Our vision is that digital monies, commodities, and assets are inevitable and all of the world’s financial infrastructure must be upgraded. Our mission is to provide broad coverage of early stage blockchain investments and access to emerging blockchain unicorns. Blockchain Coinvestors’ investment strategies are now in their 12th year and to date we have invested in a combined portfolio of 1,250 blockchain companies and projects including more than 110 blockchain unicorns. Visit us at www.BlockchainCoinvestors.com to learn more.
“We invest in blockchain businesses”