Tokens and Stocks: Tensions in the Crypto Market

Initial public offerings (IPOs) of Coinbase and Circle have marked a turning point in the crypto ecosystem, prompting other players like Kraken, Ledger, and Grayscale to postpone their IPOs due to an unfavorable market. This situation raises questions about the dynamics between crypto and traditional finance, particularly for existing cryptocurrencies like the VVV token from Venice.AI. During a roundtable organized by Delphi Digital, participants debated the relevance of a separation model between tokens and stocks, in light of Rob Hadick's statements from Dragonfly regarding the buyback of the VVV token, which depended on the company's willingness. José Maria Macedo, co-founder of Delphi Digital, emphasized that investors are hesitant to hold tokens linked to publicly traded companies, which could capture revenues while promising an uncertain buyback. Analyst Ceteris noted that the market capitalization of tokens should be lower than that of companies, as it only reflects the fees related to their utility, not the profits of shareholders. This ambiguity could be exploited to inflate token valuations, leading to negative consequences when the market deteriorates. The solution lies in clearly defining the utility of tokens to avoid any price inconsistencies.