Although Paul Mampilly writes a newsletter for investors, he has not jumped on the recent Bitcoin bandwagon. He believes they are all overvalued. However, he has learned from his extensive experience as a professional investor and Wall Street insider that the future often brings surprises. In a recent blog post, he identifies three changes that are going to survive the market bust in cryptocurrencies.
The first thing that will survive whatever happens to Bitcoin is the blockchain technology it is based on. The inventor of Bitcoin figured out how to use distributed databases to verify financial transactions without the need of a trusted third-party such as a bank. This technology fascinated many high tech people, and financial institutions and even governments around the world are beginning to use it to reduce expenses and make make financial transactions faster and more reliable. This is part of the financial technology, or fintech, megatrend Paul Mampilly has identified as one of the most powerful business trends that will make companies and their investors rich in the next few years.
Paul Mampilly also says Initial Coin Offerings, or ICOs, will replace the traditional Initial Stock Offerings, or IPOs. Wall Street investment banks have always charged small companies a lot of money to go public. There haven’t been many IPOs in recent years because most companies that want to go public cannot afford to pay the large fees Wall Street wants to charge them. Facebook paid $176 million, but few companies have that much cash. However, in 2017, companies raised $4 billion using ICOs. They cut out the Wall Street investment bankers while raising the funds they needed to expand their businesses.
Crytocurrencies are going to crash, but clearly they’re not going to go away. Instead, Bitcoin, Etherium and the others will become the gold of millennials. Young adults who wish to keep some of their portfolio in a safe haven type of investment will buy the cryptos and just hang on to the in case of a market crash.
Back in 2000, Paul Mampilly predicted Amazon, at the peak of the dot com bubble, would go down to $10. As Paul saw it, running the numbers, Amazon the stock was greatly overvalued. During the tech wreck, it went down to under $6 a share. Many of those dot com companies went out of business. However, he points out in the blog article, Amazon has had a tremendous run since 2001.
Paul Mampilly @ https://www.facebook.com/PaulMampillyGuru/