Blockchain related companies have the ‘hottest’ stocks around now. Even though they remain volatile with an uncertain future, they are seeing a lot of action.
According to experts at least 50 firms related to the field of Blockchain technology and cryptocurrencies will list in Canadian stock exchanges in this year. This is due to Canadian exchanges being more suitable for such companies compared to other markets around the world, some experts said.
A Bloomberg article said that Blockchain Stock Listings Are Set to Explode in Canada with Reverse takeovers being the preferred structure as opposed to IPOS.
“The level of activity in this market of quality plays, quality teams is as high as I’ve seen since the internet age,” Harris Fricker, chief executive officer of the Toronto-based GMP Capital Inc told news media company Bloomberg in an interview.
“Canada’s place in this is dramatically more important than what it was in the first phase of the internet.” He added.
Blockchain is the technology behind Bitcoin, a cryptocurrency and worldwide payment system which is the first decentralized digital currency, and can be used as a platform for digital assets.
Canada is emerging as a hub for bitcoin and cryptocurrency stocks amid “a virtuous circle” of expertise and business, backed by a capital markets ecosystem that supports small companies, particularly on the TSX Venture Exchange, the Bloomberg article quoted Fricker as saying.
While Canadian markets have traditionally been more inclined towards energy stocks, it is seeing a lot of changes with marijuana stocks surging and the inclusion of some blockchain and cryptocurrency related companies.
According to experts blockchain companies are likely to use a reverse takeover structure. In a reverse takeover, shareholders of the private company purchase control of the public shell company and then merge it with the private company. The publicly traded corporation is called a “shell” since all that exists of the original company is its organizational structure.
This reverse takeover method means that companies don’t have to file a prospectus or deal with new shareholders. According to the Bloomberg article, A reverse takeover was how crypto miner Hive Blockchain Technologies Inc listed on the TSX Venture Exchange. The Vancouver-based firm has soared more than 200 percent since it began trading and has a market value of about C$824 million, making it the nation’s largest blockchain company.
While experts say blockchain companies are set to boom, they don’t see the industry becoming bigger than the mining and energy sector.
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