The world of cryptocurrency has not let up in the emergence of new and unusual activities in 2021. With a new announcement that Galaxy Digital was going to acquire BitGo for $1.2 billion in stock and cash, the financial services firm which is focused on cryptocurrency and run by Michael Novogratz will be acquiring a U.S. regulated crypto custody specialist as a result.
While cryptocurrency itself is not exactly a collectible, this has a big overlap in alternative asset classes because of the emergence of non-fungible tokens (NFTs) and because more and more cryptocurrency transactions are taking place in the collectibles arena.
There is one thing that Collectors Dashboard is still trying to get to the bottom of, and it’s going to take some time to figure out — which cryptocurrency (or which ones) will emerge as the key crypto that will be used by the collectibles industry.
The outcome of how the emergence of NFTs along with the rise of cryptocurrency and other digital assets competing with and complementing sports and non-sports collectibles may not be known for quite some time. What is being demonstrated right here and right now is that the race is on and the billionaires and millionaires who have raked in new wealth are making their plays quickly and aggressively.
While the Bitgo deal includes some $265 million in cash in a mostly-stock transaction, this move will help institutions more easily and readily open up digital asset ecosystems and will help promote the use of blockchain for companies and the individuals that do business with them. To prove the point, Galaxy Digital noted in its release that the company will add a net of about 400 new clients in the deal.
One standout issue since its founding in 2013 is that BitGo is recognized as the first independent regulated custodian for digital assets and it has had a key role the development of products and services around custody and wallet infrastructure. The company has also incorporated prime lending, trading services, portfolio management, security and tax solutions which all aim to streamline the complicated world of cryptocurrencies and digital assets.
Here is where BitGo’s dominance comes into play with its large institutional base. It supports custody of over 400 coins and tokens, its assets under custody were listed as over $40 billion, links to 150 exchanges, and it is said to process over 30 billion monthly transactions
On March 30, 2021, the renowned Goldin Auctions for collectibles and trading cards partnered with the premier cryptocurrency exchange and custodian Gemini to allow payments in cryptocurrency. Their joint release even noted a tie in that would link two of the most rapidly growing alternative investment asset classes by accepting Bitcoin and Ethereum. That was on the heels of Goldin Auctions raising $40 million from well known firms and famous individuals like Mark Cuban, Dwayne Wade, Kevin Durant, Mark Wahlberg and others.
Where that deal with Goldin Auctions gets interesting is that Goldin’s @GoldinAuctions Twitter handle broadcast on April 28 that a record-breaking $1.7 million ($1.68M) paid for a Tom Brady rookie ticket card was purchased using Litecoin. The tweet also telegraphed that this was one of the most expensive hard assets ever paid for in cryptocurrency.
In another developing situation, the website nonfungible.com, as of May 5, 2021, has listed a 7-day trading value of $108.68 million over 10,990 sales of Meebits and $36.08 million for 381 sales of CryptoPunks. The lifetime sales of Meebits was the same but the lifetime sales tracked for CryptoPunks was about $305.6 million.
In another situation, as the ERC-721 standard arrived on Ethereum it allowed the blossom of the CryptoKitties craze.
The collector cards company Topps, which is coming public again via a merger with a public Special Purpose Acquisition Company (SPAC), has already begun announcing and launching officially licensed Topps NFT collectibles on blockchain.
Collectors Dashboard hasn’t even gotten into the rise of Dogecoin yet, but it is being used and touted by the likes of Elon Musk, Mark Cuban and others.
It is undeniable that collectibles have become an alternative asset class. It is also undeniable that cryptocurrency, non-fungible tokens, and other digitalization of hard assets have all migrated into a digital asset class. These are all competing for many of the same dollars that would have otherwise been invested in stocks, bonds or real estate.
The book for this story is still nowhere close to being completed.
Categories: Digital& NFT