Trend Alert! Money Is Pouring Into Private Blockchain Companies

With nearly 80,000 employees, $50 billion in annual revenue, and a market cap of $245 billion, Cisco Systems (NASDAQ:CSCO) is one of the most important companies in the internet world.

futuristic image of a hand with the words block chain floating above it. representing riot blockchain stocks

Source: Shutterstock

Based in Silicon Valley, Cisco was founded in 1984 and developed much of the early hardware and software that has made the internet what it is today.

The company got its start by connecting computers to each other throughout Stanford University. This network of computers was able to communicate with one another — a first at the time. This infrastructure led to much of the development for future internet functionality.

Although Cisco has never had the sexy appeal of a hot tech startup, early shareholders of the company became very, very wealthy. At the height of the dot-com boom, Cisco was valued at over $500 billion, giving early investors life-changing gains.

Today, Cisco is much more of a blue-chip company. Steady revenue generation, predictable product launches, and major corporate clients have enabled the company to grow in a healthy way over the past 36 years.

While Cisco may be a great investment for predictable growth, it’s not going to generate returns for investors like it did in its early years.

However… there is another tech infrastructure trend that is being built right now that will generate even larger returns for early investors…

And this trend is still in its early days.

A Tech Infrastructure Trend Too Big to Ignore

I’m talking about the development of cryptocurrency infrastructure.

Much of the hype around cryptocurrency has focused on the actual price of individual crypto currencies.

Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD), and hundreds of other digital currencies have exploded in value, turning many early adopters into multimillionaires.

Many of these successful crypto investors made their riches by simply buying Bitcoin or Ethereum and sitting back. While this opportunity still exists, an even larger investment trend is now underway…

Right now, we are in the early stages of building and implementing the actual infrastructure of our new crypto economy.

This crypto economy is more about transitioning our entire financial system to the blockchain. Eventually we’ll be transitioning property records, vehicle registrations, and nearly any type of information data to the blockchain.

You see, blockchain technology provides better security, more transparency, and, most important, a decentralized method of verifying that information and transactions are legitimate.

So while most investors are just now learning about the blockchain and how to purchase cryptocurrency, we as private investors need to understand what opportunities are available within the infrastructure of the crypto world.

One example of this is Gibraltar, a U.K. territory located at the southern tip of Spain. This tiny territory recently announced its plan to integrate blockchain technology into its existing systems to improve the delivery of public services.

Although Gibraltar is tiny (population: 34,000) and, therefore, can implement changes relatively quickly, the writing is on the wall for larger governments.

Startups that are in the early stages of development will be positioned perfectly when major governments start to shop for blockchain infrastructure services.

We only need to look at private markets to get a preview of where we’re headed…

Big Investors Are Already Making Moves

The world’s biggest traders are already making massive bets on blockchain data. These “bets” are not speculating on specific cryptocurrencies. Instead, they are backing the development of platforms that enable more efficient transactions.

As reported by The Wall Street Journal:

“Suppose you could buy a share of Tesla Inc. and send it to a friend in Shanghai as easily as sending an email. Or imagine placing a bet on the inflation rate at the end of President Joe Biden’s term, which would pay off in bitcoin if you were right.

“All that could become reality thanks to a project backed by some of the world’s biggest quantitative and high-speed trading firms.

“Pyth, the brainchild of Chicago-based Jump Trading Group, is a blockchain-based technology service that seeks to provide free, real-time data for a variety of crypto projects.”

Meanwhile, in New York, a casino developer is expected to submit plans soon to develop the world’s largest cryptocurrency trading floor. The ideal location would be somewhere in Manhattan, but state legislators would need to approve the project and its location.

This project, or one like this, is likely to happen within NYC as the city tries to stay relevant in the new crypto economy. New York’s mayor-elect has even stated that he’d take his salary in Bitcoin… just like the mayor of Miami.

But the most telling part of this shift-to-blockchain trend can be seen in the venture capital world.

2021 has seen over $27 billion invested into crypto startups, which is more than the previous 10 years, combined.

A chart showing venture capital investments in crypto and blockchain companies between 2012 and the present.The New York Times reports:

“Many of the investments were made by the venture capital arms of crypto companies, businesses whose continued growth will depend on the ecosystem expanding.”

As crypto prices continue to march higher and blockchain infrastructure continues to be in demand, funding for early-stage companies in the crypto sector are likely to keep growing.

Sure, you could still make money on speculating on individual cryptos, but the daily swings could make your head spin.

The real money is going to be in the blockchain infrastructure plays.

For early-stage investors, the time to start tracking this trend is now. The writing is on the wall; we can’t ignore it any longer.

We’re already speaking with several companies that we like in this space. Stay tuned!

Here at VC Digest, we’ll be sure to keep you updated as the trend unfolds.

On the date of publication, Cody Shirk did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

By focusing on megatrends that will shape the future, Cody Shirk uncovers generational wealth in the private investing space. To make sure you never miss Venture Capital Digest, click here to subscribe.


Article printed from InvestorPlace Media, https://investorplace.com/venturecapitaldigest/2021/12/trend-alert-money-is-pouring-into-private-blockchain-companies/.

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