Jeff Brown is pitching something he calls a “global token exchange” recently, abbreviating it “G.T.E.”, and reader questions are piling up on the doormat here at Gumshoe Manor, so it’s time to take a look…
The basic spiel, which takes the form of a long presentation/interview between Jeff Brown and a hired talking head that leads to an ad for Jeff Brown’s Near Future Report (that’s his intro level newsletter, $49/yr), is all about how “tokenization,” the process of making everything liquid and investable by breaking ownership it up into little pieces that are stored on the blockchain, is going to change the financial world in dramatic ways… akin to the huge revolution that was spawned with the birth of the first stock exchange.
That first formal stock exchange, most people say, was formed in Amsterdam in the 1600s, and was created to trade shares of the Dutch East India Company, which was the largest company in the world at the time, and is often credited as being the first publicly traded stock (some folks estimate that in today’s dollars, the Dutch East India Company would have had a market cap of about $8 trillion at its peak).
This next wave of revolutionary “tokenization” might be most recognizable at the moment for the fact that it enables the trading of Cryptokitties and little collectible snippet videos of NBA plays, so the headlines often make it seem trivial in comparison… but, of course, those stories also draw attention to a world where much more “real” stuff can also be “tokenized”. So what’s Brown talking about?
Here’s the start of the ad, to give you a little taste:
“Why are Billionaires like Elon Musk, Mark Cuban & Michael Jordan Investing in This Odd New Technology?
“Legendary forecaster who called #1 returning tech stocks of 2016, 2018, 2019 & 2020 — reveals how $25 gets you into one technology set to grow 2,000X BIGGER than Bitcoin”
And yes, Brown goes into that Dutch East India example and some others in explaining the importance of “tokenization”… here are a few more snippets to give you the idea:
“In 1602, the world’s first stock was born: The Dutch East India Company. Before then, nobody knew what a stock was. The bulk of global wealth was private — until one simple idea changed the world overnight:
‘Let’s split up our company into small pieces, and sell them to investors.’
“We take it for granted now, but 400 years ago, this was a technological breakthrough. It was the first time in history somebody could own a ‘fractional piece of something….
“‘G.T.E.’ is allowing us to apply that simple idea — owning pieces of things — to the ENTIRE world. Because this technology allows almost anything on earth to become tradeable.
“Like this Michael Jordan rookie card… this Picasso painting… even this $2.5 million dollar Kentucky-derby winning racehorse….
“… imagine a world where just about everything is publicly traded… every car… every restaurant… every work of art… every piece of real estate… every software program and new technology.
“Imagine being able to take a direct stake in anything!
“What we’ve seen so far is the first wave hitting the shores.
“But there’s a quadrillion-dollar tsunami behind it that hardly anyone is paying attention to.”
So that’s the basic idea, that this concept of a Global Token Exchange is going to democrative all kinds of assets, letting you buy and sell almost anything, not just stocks.
And we’ve all seen examples of that kind of thing, even recently with fractional ownership projects like Rally Rd. for collectible cars and handbags and other stuff, or Masterworks for fine art, neither of which is explicitly keeping records of the fractional shares on the blockchain. In that way, the world of cryptocurrencies, security tokens and NFTs is maybe not exceptionally earthshaking… it’s an evolution, and sometimes when evolution moves fast it feels like a revolution.
Fractional ownership as a concept has existed for a long time, you can buy pieces of lots of things beyond just stocks (and, of course, we’ve moved from having to trade in round lots of 100 shares of stock 50 years ago, to trading “odd lots,” and now to trading fractional shares)… but now it’s definitely getting a lot easier, and should be possible with a lot less friction from middlemen, which means costs and hassle should come down and usage of the technology should rise.
More from the ad, when he begins to hint at the investment he recommends:
“We’re in the opening seconds of what insiders call ‘The race to tokenize everything.’Are you getting our free Daily Update
"reveal" emails? If not,
just click here...
“But as tokenization allows the $2.1 quadrillion private economy to go digital, things will start moving even faster. That’s why it’s critical to get in now.
“And in a moment, I’ll show you how anyone can own a piece of the entire Global Token Exchange for just $25….
“That’s the beauty of today’s play: One investment lets you own the whole exchange.
“So instead of making dozens of different investments — and praying each of them go up — one investment lets you profit from every transaction.
“All on a ‘field’ that’s 48 times bigger than the stock market.”
He goes on to describe this one investment as “like a tollbooth” for the tokenization revolution, and as a “buy and hold” investment. So what is it?
Other than Brown saying that “this is the greatest buy & hold opportunity I’ve seen in my 36 years of investing,” and that the starting price is around $25, and it’s easy to buy, we get essentially no other clues. Just the concept that this investment is somehow core to the idea of tokenization.
Though we do also get this next bit, which could be a clue:
“… Blockchain technology is like Visa on steroids. 70% of Americans have a credit card.
“And Visa processes a whopping 1,700 transactions per second to keep up with our country’s shopping addiction….
“… the Global Token Exchange is expected to process 1 million transactions per second. That’s 500 times more bandwidth than Visa, the world’s leading credit card company.”
And a side reference to one of the “real world” financial assets that’s been tokenized:
“In fact, the world’s largest central banks are already using it. The investment bank of the European Union just issued the world’s first blockchain-secured bond. Guess where the EU secured their $120 million, Chris?
“Chris: On the blockchain?
“Jeff: Exactly. The EU is trusting hundreds of millions of dollars on the blockchain because it works.”
And that’s about it… so what’s Jeff Brown teasing as “My #1 Easiest Way to Profit from the $2.1 Quadrillion ‘World IPO Day’?”
There are several cryptocurrencies that are offered by some of the companies aiming to be the next platform, improving on Ethereum — and of those, a few were trading near $25 at some point in the past month or so, including Polkadot (DOT), Uniswap (UNI), Chainlink (LINK) and Cosmos (ATOM). I wouldn’t talk you out of dabbling in those, some small chunks of several of them are in my Coinbase or Voyager account (though more than half of my cryptocurrency holdings are in Ethereum, and another 25% or so in Bitcoin), but I have no idea which one might really gain traction. Solana (SOL), the most recent darling of the crypto traders, is also pretty close, though wasn’t quite down below $25 in August.
And it’s also possible that he’s pitching something more esoteric — there are lots of relatively young companies who are involved in the cryptocurrency space, so he could be teasing one of those… perhaps even something I own, like Galaxy Digital (GLXY.TO, BRPHF), which owns a lot of cryptos and does venture capital investing in that area in a bunch of interesting little companies who are trying to ride that “tokenization” wave, or another company that we’ve looked at before, like Circle (which runs USD Coin and offers some crypto on