News on cryptocurrencies
In spite – or maybe because – of this year’s devaluation, cryptocurrencies, or the alternative currencies of the Bitcoin or Ethereum class are seen by the specialists as an investment opportunity. However, be cautious! The high volatility of these investments makes me recommend some prudence in this respect.
- Bitcoin continues to decrease. On 22 November, when I wrote this article, the exchange rate (if we may use this term for cryptocurrencies) was of about $4,500. This means that, roughly speaking, Bitcoin has lost all the ground gained up to 2017. This could be a good time to buy, but I, myself, haven’t bought any. First of all, because I do not see myself an expert in speculative earnings and, secondly, I believe in thoroughly built things.
- Ethereum is slightly increasing. The second best known currency exceeded, also on 22 November, 133 dollars, after a historical minimum value of $125.6. This is a slight increase in a long time. If this trend continues over the following months or years, we may be able to speak of a start of stabilization on the cryptocurrency market, after what I believe to have been an initial bubble. For the time being, however, we do not have solid grounds to be optimistic.
- Forbes said in an article that the alternative coins are “in a transition from a bad idea to an actual scam”. Whether such a pessimistic view will take shape in the future remains to be seen. The technology behind cryptocurrencies is still a valid and revolutionary idea. The history of mankind has seen that atomic fission has led to both bombs and nuclear power plants. We should keep an eye on the Blockchain.
- Also read this article from Bloomberg on the investigation carried out by the American Justice Department in respect of the cryptocurrencies price manipulation. Spoiler: is has to do with traders and not with the currency itself.
- To conclude on an optimistic tone, it is also Forbes that says that alternative currencies would be great if the money holders understood the technology. Let’s think a bit about countries like Somalia and China: the money could reach the relatives of those who had left their countries to work abroad and this without the substantial commissions charged by banks or Western Union. I for one am very curious how many if any of the Romanians working abroad use such a solution.
I have purposely looked through contradictory information, just to give you an indication of the complexity of the cryptocurrency market. This article does not aim at discouraging you to invest in such difficult assets, but it is a starting point towards a type of financial education that schools, even those of higher education, provide neither in Romania, nor in other countries. Find the answers to your questions online, as we are living in times when information is (quasi-)free and it produces value.
Over the last decade, I've built my professional life as an investor, focusing on 3 key areas: financial services, real estate and tech startups. I’ve participated in the setup and development of two major fintechs, and after those two successful exits I’m now directing my resources into building a new enterprise in this area – the Key Way group.
I've started, participated in and developed companies in Romania, as well as Bulgaria, Hungary, Czech Republic, Germany, the UK, Mexico, Dubai and South East Asia. I'm constantly looking for new segments, new markets and new opportunities, and therefore I interact regularly with the regulator institutions and official agencies in various countries and markets.
The most recent example is the GCC area (Gulf Cooperation Council - Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates, and Saudi Arabia). I started to research opportunities in that area at the end of 2018 - more specifically, the United Arab Emirates, which are establishing themselves as one of the most dynamic markets in the world.
The whole experience of working with the official institutions there was a great example of how to attract and encourage investors! ADGM, the Abu Dhabi Global Markets regulator, was established quite recently and I was absolutely impressed with their professionalism.
To start off, I researched the local market regulators online. The information was clear and easily available: I contacted them online, via their website and LinkedIn accounts. They responded promptly, and in only a few days, we set up a series of meetings with the financial markets regulators in both Abu Dhabi and Dubai!
The ADGM gave me full support and very clear, detailed information on what and how I need to do to obtain a trading licence in financial services in the UAE. I met with representatives from both the ADGM registration department (where all new businesses have to register before they acquire a licence for online trading) and from the FSRA (Financial Services Regulatory Authority).
They were very clear on the procedure, steps to follow and criteria we need to meet, which is a fantastic help for an investor on a new, highly regulated financial market.
In a few days I started the onboarding procedure - everything happens online, everything is digital, everything is set up for maximum ease and transparency.
They set investors up for success, but they make sure they vet them thoroughly as well! A "user friendly" approach does not mean lower standards, quite the opposite - they made sure I meet all commercial and business criteria, they assessed my financial, capital and business status and previous experience, and checked references from markets in which I operated previously.
We went through a process of very rigorous assessment and due diligence, and several meetings where I detailed our business plan and long term vision. Professional but friendly - you feel welcome, encouraged and supported as an investor.
Furthermore, their “enthusiasm”, or appetite for new business, equaled mine! They’re happy to welcome new businesses, they work hard to attract them and to set them up for success. I was very impressed that they genuinely appreciate the fact that investors, however big or small, choose their market to set up a company.
I’d love to see this same level of energy, hard work and appetite for business in my home country, Romania.
While other jurisdictions welcome investors and work hard to create the framework for development and success, I often feel that the Romanian regulators, for financial markets and not only, start from a default position of suspicion or, at best, indifference. Investors are regarded with thinly veiled (if at all veiled!) suspicion and distrust and sometimes downright hostility, you almost feel guilty or embarrassed to be successful financially.
I hope to see this mentality change in Romania, because I, as well as most Romanian entrepreneurs I know, really want to make our country a top choice for investments, not just in outsourcing and services. We want to make Romania known for its know how and creativity.
I think Romanian regulators should remember that their whole purpose of existence is to enable business, not hinder it. And as investors, especially once we see best practices from other jurisdictions, we need to remind them of this reality.
- Fintech OS - B2B services and TaaS enabling automation for financial services. The fact that this is a Romanian company that has achieved such rapid growth proves that (to paraphrase) geography is not destiny. Their experience is inspiring.
- Fagura - P2P Lending. Although Fagura is actually coming from Moldova, they are present in Romania. This is a friendly peer-to-peer platform, modelled on UK similar companies. I think it has good potential for success.
- Smart dreamers – a platform for recruitment marketing automation, they’re already in the UK, the US, and Singapore, with enterprise-ready software that helps companies reach and engage with potential candidates online.
- Medjobs – this is a platform for recruitment and jobs in the healthcare sector. I like their focus and the fact that they’ve honed in on this very specific opportunity, as it is a very dynamic niche and was generally very fragmented.
- Typing DNA – such an original idea! They’ve developed an app for typing biometrics authentication – recognizing people from the way they type, this is an AI-based solution for risk-based authentication and fraud prevention.
- Competitors.app – a very useful and comprehensive app for monitoring competitors’ marketing activity across online channels.
- Finqware – this was badly needed in Romania, since most companies and people have several bank accounts and they need a centralized dashboard for their finances.
- Keez – A user-friendly alternative to accounting, payroll, and ERP software.
- Teleport HQ - An AI powered platform and suite of open source tools which simplifies UI building and adds realtime optimisations by analysing user's intentions.
- Cyscale - a Multi-Cloud Platform, for all major providers like Amazon, Google and Microsoft, which handles Cloud Native Security, Threat management and Secure Cloud Design.