Now that the 2024 election is over we can go back to watching television without every ad featuring one politician attacking their opponent. In the crypto world the question is, will we see a surge of crypto IPOs post-election. Prior to the election Bloomberg speculated about this issue. There has been something of a crypto IPO drought during 2024. The fact of the matter is that investors do not like uncertainty. Looking ahead during 2024 they saw the prospect of significantly less or even no regulation under a Trump presidency, a continuation of tight regulatory practices if Harris were to follow Biden’s lead or a somewhat looser regulatory scheme under a new Harris regime. It would appear that folks were simply standing back and keeping their powder dry as they waited for the election outcome.
Uncertainty Versus Certainty and Investment
The extremely successful and famous investor, Warren Buffet, is an advocate of everyone getting involved and voting in elections. He has even been known to drive a van around Omaha, pick up people with transportation issues and drive them to the polls. However, he does not endorse candidates nor give money to political causes. He has been quoted as saying that he does not worry about who will be in charge as he has been able to navigate various financial environments under presidencies going back more than half a century. What he, and other long term investors want is a chance to see what a new administration will do and how he should therefore adjust his approach to buying and selling stocks. It would appear that in regard to waiting to see who will be in charge for the next four years in the White House and who will control the House and the Senate before pulling the trigger on new crypto IPOs.
Are Crypto IPOs Good Investments?
If you got into crypto early or simply went all in at the bottom of the market during crypto winter you are probably happy with your Bitcoin, Ether, or other crypto investments at this point. If you have a knack at timing the market, not getting fooled by wash trading in Bitcoin, and routinely making money as Bitcoin fluctuates up and down, why do you want to do anything else with your money. How profitable is an investment in a crypto business as opposed to crypto trading? After all, folks who invested in FTX lost their shirts.
A Crypto Exchange as a Pick and Shovel Business
Here at Profitable Investing Tips we are fond of quoting a saying that comes from the California gold rush day. When everyone is digging for gold the best money is to be made selling picks and shovels. While some folks struck gold and become filthy rich the most reliable profits went to folks who did not take risks but just sold the tools needed. A company like Microsoft that makes software for people doing business and provides huge cloud service comes to mind. They are a trillion dollar company that provides the tools for others to take business risks. As such, someone who is more interest in a steady and reliable income stream as opposed to worrying about the next crypto winter may well want to watch for a wave of crypto IPOs coming this year as they sort out how the new administration will deal with the crypto industry at large, issues like a US digital currency, and regulator issues. Like with Warren Buffett’s successful long term investing, it does not matter so much who is in charge as your assessment of how to invest during a given administration.
The good part about a reasonable degree of crypto regulation is that we will less likely be snookered into putting our money into schemes like FTX but rather into profitable businesses that provide solid long term income and income growth!