In Central Banks We Trust? ICE’s Bakkt Suggests Otherwise
As a hybrid day trader/long-term investor, I’m all about patterns. No, I’m not talking about flags or pennants. My research goes deeper than that. I look at market movement, industry trends, and under-the-radar actions from major players that could have long-term consequences. Seemingly innocuous events often give me clues to what’s coming next.
The Bakkt Holdings (BKKT) SPAC deal back in October was one of those events. As the Motley Fool so elegantly put it, “The market shrugged.” It didn’t seem like a big deal. Sure, the cowboys over at Reddit got ahold of it for a bit and share prices spiked over $42, but that’s a common tale in a democratized market. The real news is in the function of this company.
Bakkt was created by the Intercontinental Exchange (ICE), owners of the New York Stock Exchange (NYSE). It was established to handle digital assets. Yes, the power behind the motto “In Central Banks We Trust” set up a platform to trade DeFi. Are they hedging their bets or is this a sign of things to come? It looks to me like Web 3.0 is taking a stroll down Wall Street.
Web 3.0: Blockchain or Advanced AI?
I’ve been around the block a few times, so I know that concepts are never fully defined when you start seeing identifiers like “2.0” or “3.0” attached to them. At the start of the new millennium, everything was 2.0. This year, the beginning of a new decade, we’re seeing the term “Web 3.0.” It’s an amorphous descriptor right now, but the movement is real.
Without getting too technical, let’s just say that Web 3.0 is the evolution from centralized web services, like Facebook and Google, to a more democratized internet built on the blockchain. What that looks like is still speculation. Advanced AI applications will be a part of it. So will the Metaverse. I’ve written extensively on how to invest in those.
Where are the opportunities for ground floor investing in Web 3.0? Consider Bakkt Holdings (BKKT) one of them. After a meteoric rise and swift fall last month, they’re still up 32% this year. ICE is only up 15%, but just look at their chart pattern for the past five years. As my startup friends can relate to, it’s consistently “up and to the right.”
For an AI stock recommendation, I’m going to go out on a limb and target Remark Holdings (MARK). The developers of the KanKan AI look like a dog if you track their recent performance, but they may have fallen victim to the memers back in October. Sales were up 75% for Q2 and I think there’s hidden value here in a 3.0 world. At $1.20 a share, I’m buying.
Abaxx Technologies Moves on Carbon Credit Market
After a wild ride in 2021, Abaxx Technologies Inc (OTC:ABXXF), once hyped as a potential challenger to Bakkt, has opened up their first spinoff company: Base Carbon. The carbon credit market is projected to be worth over $50 billion by 2030 and looks like a pure Web 3.0 venture built on the blockchain, with carbon credits bought and sold as NFTs.
Change is coming. The current structure of the web, with two or three major players in control, is not sustainable. Can the same thing be said about the stock market? We’ve already seen increased democratization with the success of Robinhood and the influence of Reddit meme traders. What comes next? We’ll keep you posted as this story develops further.