1/ @Anchorage: The First Federally Chartered Digital Bank
In January, the US government gave there largest stamp of approval for crypto currencies like #Bitcoin
Here is my full analysis of the company poised to disrupt the banking system
In January, the US government gave there largest stamp of approval for crypto currencies like #Bitcoin
Here is my full analysis of the company poised to disrupt the banking system
2/ Cryptocurrency has exploded over the past 5-10 years.
Most people are familiar with #Bitcoin, but there are many other digital assets such as #Ether, #ZCash, #FacebookDiem, etc.
The space changes rapidly, and it requires significant levels of agility and expertise to keep up
Most people are familiar with #Bitcoin, but there are many other digital assets such as #Ether, #ZCash, #FacebookDiem, etc.
The space changes rapidly, and it requires significant levels of agility and expertise to keep up
3/ Founders @nathanmccauley and @diogomonica have over 20 years of security expertise.
Both led security within payments at @Square in the nascent stages
They recognized the upcoming challenges of securing digital assets.
In 2017, @Anchorage was born.
Both led security within payments at @Square in the nascent stages
They recognized the upcoming challenges of securing digital assets.
In 2017, @Anchorage was born.
4/ @Anchorage is a critical factor in the mass adoption of crypto
With their platform, traditional financial institutions can securely leverage digital assets for financial services
With @Anchorage, traditional FI’s can go from digital nascent to digital native overnight
With their platform, traditional financial institutions can securely leverage digital assets for financial services
With @Anchorage, traditional FI’s can go from digital nascent to digital native overnight
5/ The problem statement is clear, but let’s dive deeper into assessing @Anchorage itself
Let’s look at:
1. Product
2. Business Model
3. Market
4. Opportunity
5. Competition
6. Final assessment
Let’s look at:
1. Product
2. Business Model
3. Market
4. Opportunity
5. Competition
6. Final assessment
6/ Product
With the @Anchorage digital platform, traditional FI’s can instantly offer their clients five key @Anchorage features: Custody, Trading, Staking, Governance, and Finance
With the @Anchorage digital platform, traditional FI’s can instantly offer their clients five key @Anchorage features: Custody, Trading, Staking, Governance, and Finance
7/ Business Model
@Anchorage operates similar to traditional banks; they have three primary revenue streams
1. Charge basis points on Assets Under Custody (A)
2. Brokerage fees
3. Earn yield on credit spread of lending
@Anchorage operates similar to traditional banks; they have three primary revenue streams
1. Charge basis points on Assets Under Custody (A)
2. Brokerage fees
3. Earn yield on credit spread of lending
8/ Business Model
@Anchorage is offers their services direct to clients and through partnership.
For example, they could directly offer crypto-based loans.
Or
They can enable others to do so through partnership. Example: Silvergate Bank
medium.com/anchorage/anch…
@Anchorage is offers their services direct to clients and through partnership.
For example, they could directly offer crypto-based loans.
Or
They can enable others to do so through partnership. Example: Silvergate Bank
medium.com/anchorage/anch…
9/ Market
If you are reading this on @Twitter, then you know the crypto market has exploded.
Two major market tailwinds: Increased adoption & momentum
@MicroStrategy , @Tesla, @Square, and @Twitter have all started a wave of corporate adoption. The timing is right.
If you are reading this on @Twitter, then you know the crypto market has exploded.
Two major market tailwinds: Increased adoption & momentum
@MicroStrategy , @Tesla, @Square, and @Twitter have all started a wave of corporate adoption. The timing is right.
10/ Market
Two potential headwinds: Regulation & Skepticism
@Janetyellen shook crypto by signaling a potential opposition. It is still TBD how or how much the US government will regulate crypto
Two potential headwinds: Regulation & Skepticism
@Janetyellen shook crypto by signaling a potential opposition. It is still TBD how or how much the US government will regulate crypto
11/ Market
Skepticism will always be a concern. Will volatility scare away adopters?
Crypto is still very nascent, so increased adoption and technological education will be critical to driving market size
Skepticism will always be a concern. Will volatility scare away adopters?
Crypto is still very nascent, so increased adoption and technological education will be critical to driving market size
12/ Opportunity
Based on @Anchorage’s revenue streams, I size the opportunity at a bear valuation of $16B and a bull valuation of $31B.
These valuations are only based, however, on 5-10% adoption levels within US markets.
Based on @Anchorage’s revenue streams, I size the opportunity at a bear valuation of $16B and a bull valuation of $31B.
These valuations are only based, however, on 5-10% adoption levels within US markets.
13/ Opportunity
Long-term, the adoption could be much higher, and it could be global.
For the purposes of @Anchorage’s opportunity, I kept assumptions fairly conservative.
$16-31B is a very conservative range, in my opinion
Long-term, the adoption could be much higher, and it could be global.
For the purposes of @Anchorage’s opportunity, I kept assumptions fairly conservative.
$16-31B is a very conservative range, in my opinion
14/ Competition
@Anchorage has three categories of competition:
1. Direct Fintech - @BitGo, @PaxosGlobal, @krakenfx
2. Indirect Fintech - @coinbase , @Square , @PayPal
3. Financial institutions - @DigitalAssets , @BNYMellon
@Anchorage has three categories of competition:
1. Direct Fintech - @BitGo, @PaxosGlobal, @krakenfx
2. Indirect Fintech - @coinbase , @Square , @PayPal
3. Financial institutions - @DigitalAssets , @BNYMellon
15/ Competition
@Anchorage is the only player in the Direct Fintech field with a Federal charter. This gives them a distinct advantage.
This week, however, @Square announced banking operations. This is now the biggest threat (or future partner?) to watch.
@Anchorage is the only player in the Direct Fintech field with a Federal charter. This gives them a distinct advantage.
This week, however, @Square announced banking operations. This is now the biggest threat (or future partner?) to watch.
6/ Competition
It will be a concern to fully understand how much the Indirect Fintech and traditional financial institutions try to compete.
@coinbase , @Square , and @PayPal have the means and users to make a direct challenge.
It will be a concern to fully understand how much the Indirect Fintech and traditional financial institutions try to compete.
@coinbase , @Square , and @PayPal have the means and users to make a direct challenge.
17/ Investors
Series A ($17M): @naval , @polychaincap , @SciFiVC , @HashtagAngels , @khoslaventures , @eladgil
Series B ($40M) : @a16z , @Visa , @blockchaincap
Series C ($80M): @a16z , @Lux_Capital / @wolfejosh , @blockchaincap
Series A ($17M): @naval , @polychaincap , @SciFiVC , @HashtagAngels , @khoslaventures , @eladgil
Series B ($40M) : @a16z , @Visa , @blockchaincap
Series C ($80M): @a16z , @Lux_Capital / @wolfejosh , @blockchaincap
18/ Final Assessment
Deep-dives on each segment in full writeup: jeffburke.substack.com/p/anchorage-th…
Deep-dives on each segment in full writeup: jeffburke.substack.com/p/anchorage-th…
19/ Additional information
Anchorage Blog: medium.com/anchorage
@APompliano interviews @diogomonica:
@Anchorage founding story:
Anchorage Blog: medium.com/anchorage
@APompliano interviews @diogomonica:
@Anchorage founding story:
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