Here is the table from the latest SPInvest Earnings and Holdings Report.
We are starting with this because it presents the idea of what is possible and how we can decentralize a lot of things in the future, especially as it related to funding.
As of the report, the holdings, in USD terms, were more than $200K. Certainly, this could have seen a bit of a hit with the market selloff this week. However, the point still holds for illustration purposes.
A fund that was not even in existence two years ago has a holding of $200K, all in crypto. This was a project that, for the most part, flew under the radar. Holders of the tokens are not major Wall Street investors. Instead, they are everyday people who are just looking for a decent return on their crypto.
What if this process was repeated 1 million times? And why would it be important?
Cryptocurrency is creating an entirely new economic model that can allow for enormous advancement through the efforts and financing of millions of people around the world. It is something that can be fairly easily since we are operating at the digital level. Thus, we will not only see people generating outstanding returns but innovation and start up development can explode.
How much impact could something like this have?
With SPInvest sitting on about $200K in holdings, if that we duplicated 1 million times across the world (crypto-sphere), we would be looking at $200 billion in investment capital. While that is not on the level of Wall Street and Venture Capital firms, it is a huge chunk of change.
What is really important here is where the proceeds go. Presently, since the existing financial system is centralized, funding can only come from authorized entities. This makes it a rather small circle. Firms that specialize in this arena tend to make enormous profits over time. The recent IPO by Coinbase shows the potential that exists. Some firms were able to cash out with hundreds of millions of dollars on this single deal.
The challenge is that we are excluded from that. Since we are not part of the "accredited investor" class, we are left to pick up the crumbs when they come along. This only serves to widen the wealth gap.
Another issue is that those who are in need of funding have to go great lengths just to get on the radar of the VC firms. Even then, it is a difficult process to get the money. These entities are looking for the large payday. They play big, thus no small change is allowed.
Obviously this is a problem for projects that are not looking for the hundreds of millions of dollars, since the payout will not be in the billions. Everyone would like those opportunities but, if we are honest, few of us have multi-billion dollar ideas.
That does not mean that we cannot generate worthwhile ventures that can be extremely profitable and bring a lot of advancement to a particular niche. We know that is possible. People all over the place have wonderful ideas that are in need of funding.
For this reason, if we had a million funds like SPInvest, just think about all the amazing innovative projects we could help get started. This would, hopefully, pay off extremely well financially. However, the other aspect is that we could help to start a lot of things that could benefit society. There are areas of expertise in every field. Helping people to bring their ideas into marketable products or services would be a boom for humanity.
Cryptocurrency is starting to offer this opportunity. As we start to fill our bags, and they increase in value, the question always becomes what do we do with our money? Of course, we can just keep playing the markets in an effort to generate a return. That is something that many in the present financial system did successfully. However, when we step back, are many of them really making a difference?
The same cannot be said for the Venture Capitalists. While they can be like sharks, the reality is they do provide the funding for many projects to get off the ground. Many of the companies we interact with on a daily basis, especially in the tech arena, got their start in this way.
Certainly, the VCs made out like bandits, with profits from companies going public reaching epic proportions. Nevertheless, this is still centralizing the process to a great degree.
If crypto is going to serve it use case, we need to see more than a million SPInvests showing up. The idea is for average people to take their holdings and put them to use. It is a way that projects can be found that will lead to a nice payoff while also providing something for a community or group of people to use.
As the tentacles of DeFi spread out, we will see the opportunities such as this arise.
It is where the beginning of many great companies can be found.
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