Editor’s note: Next week, we’re going to add Draper Esprit PLC (LON: GROW) to our portfolio. I’ll have full details on the recommendation next week. But here are some basic facts:
- Draper Esprit is a unique and publicly traded investment that is completely under the radar of most investors.
- It’s a publicly traded venture capital firm that owns a large stake in Ledger, one of the two leading crypto hardware wallet manufacturers. Ledger has sold more than 1 million hardware wallets to date. The company is now developing enterprise-level solutions for institutional investors and is extremely well-positioned to take advantage of future growth in crypto markets. You can read more about Draper Esprit’s investment in Ledger here.
- As a publicly traded VC fund, Draper Esprit also owns shares in dozens of other extremely high quality private companies throughout Europe. It would be an excellent investment even without the stake in Ledger – the crypto angle is simply a cherry on top.
Draper Esprit trades on the London Stock Exchange, and the only online broker I’ve been able to find in the U.S. that offers shares is InteractiveBrokers.com. You can buy it there or, if you have a full-service broker such as Merrill Lynch or Morgan Stanley, your advisor should be able to access shares as well.
Please note that this equity is relatively thinly traded, so use limit orders and try to get it for less than 490 pence.
Crypto Market Update: Awaiting a Catalyst
Most cryptocurrencies are struggling in this market.
It’s frustrating. But most of the time, this is the reality of holding cryptocurrency. It’s long periods of waiting followed by short periods of exhilaration.
Fortunately, there are multiple positive catalysts on the horizon that could turn the market around at any time.
The primary catalyst we’re watching for, of course, is institutional buyers coming into the market in force. The signs of progress are there, with the New York Stock Exchange, Nasdaq and other players making major moves into crypto markets.
As many as 14 separate applications for cryptocurrency ETFs are also awaiting approval from the SEC. The launch of publicly traded funds that hold real cryptocurrency will be a game-changing development when it happens.
These things take time. So for now we remain in what I view as the calm before the storm.
We also have the possibility of China reopening crypto markets to its citizens. In my view, this is inevitable. The timing just depends on how long it takes the Chinese government to get comfortable with a regulatory framework.
We know for certain that China has not forgotten about the massive potential of crypto and blockchain. In a speech at the Chinese Academy of Sciences, President Xi Jinping gave a nod to crypto/blockchain, noting that “a new generation of industrial revolution is substantially reshaping the global economic structure… with artificial intelligence, Internet of Things and blockchain constantly making application breakthroughs.”
The State Council of China also announced it will “vigorously develop financial technology and accelerate the research and application of blockchain and big data technologies under the premise of legal compliance” (emphasis mine).
Before China effectively blocked its citizens from buying crypto at exchanges last year, the country had made up a bulk of new money entering markets – and it was a major factor in the bull run. If and when China reverses course, I expect it to greatly contribute to the “next leg up” for markets.
I’ll have a full portfolio update for you next week, along with the details of the Draper Esprit recommendation.
Have a good weekend, everyone.
Adam