Who Are Today’s Alternative Asset Investors?
Bloomberg reported in December of last year that the ‘global market cap’ — that is, the value of every stock in every company worldwide — had recently passed the $80 trillion mark, on a steady course to a $100 trillion valuation. Worth noting is that these staggering figures do not account for other investment vehicles — alternative assets boast a combined value of $7.7 trillion.
A focal point of OpenFinance Network’s mission is not only to educate individuals from all walks of life on how to sensibly invest in alternative assets (specifically security tokens), but to provide them with the tools to do so. Blockchain technology has equipped us with the means by which to improve financial inclusion. With the OpenFinance Network (OFN), we aim to make this a reality.
Alternative assets are more difficult to exchange than stocks. Artwork, funds, and real estate all constitute alternative assets. There has been a lot of media attention recently around the rise of the “security token;” all this refers to is the digitization of a security, thereby rendering the tracking and exchange of ownership much easier.
The alternative asset market has incredible untapped potential to garner returns for investors. The reason for this stems from a history of convoluted processes combined with a lack of liquidity. By leveraging the automation functions enabled by blockchain technology, we at OFN are able to streamline the clearing and settlement for alternative assets process, which makes the exchange time much faster and improves liquidity.
A crucial step in the early days of developing our platform was breaking down the demographics to paint a better picture of the current investors interested in participating in the burgeoning alternative asset market, and to understand their priorities. Ensuring we keep our finger on the pulse of the rapidly-evolving landscape is key to fine-tuning our resources. Based on the September analytics of OpenFinance Network users who have completed the signup process, we discovered that, gender-wise, 45.85% of investors were female, versus 54.15% male. From our sample, we also determined the spread in age:
- 27.5% of investors were aged between 18–24
- 33.5% of investors were aged between 25–34
- 15.5% of investors were aged between 35–44
- 12.5% of investors were aged between 45–55
- 5.5% of investors were aged between 55–64
- And a further 5.5% of investors were aged over 65
It’s great that so many different demographics are interested in trading security tokens. It’s incredibly important, we feel, that women take advantage of the opportunity presented in the new space of alternative assets. Historically, women have had less access to such opportunities in a traditionally male-dominated financial sector. It’s a trend that’s slowly being reversed, and one that we actively strive to eradicate altogether. A near even split between male and female users on the OFN platforms is certainly encouraging.
Another sector we want to encourage participation from is young people (Millenials and Gen Z). Digital assets are inevitably heading for a permanent fixture in the future financial economy. Moreover, given the constantly changing labor forces and work, it’s vital for the financial well-being of future generations to maintain multiple streams of wealth generation. Indeed, given young people’s’ familiarity with the digital audience, we see millennials as the perfect first adopters of utilizing security token trading platforms such as ours.
Finally, we expect experienced investors and financial traders to easily adopt this improved model of trading, because these individuals understand better than anyone the need for more streamlined and efficient processes. We believe institutional investors will especially appreciate our efficient KYC and AML system and smooth trading processes made possible with blockchain technology. As more assets become tokenized, demand for platforms like ours that improve liquidity will only increase.
What we’ve learned from our research is that easy-to-use and intuitive systems are essential for adoption by all demographic sectors. Blockchain applications need to be accessible to the degree that the average user need never know anything about the backend — much like how individuals can use household appliances without considering the internal mechanisms that make their operation possible.
Fundamentally, we believe financial inclusion will arise from simplicity in the mediums that investors use. It’s with this ethos that we’ve build the OFN: our focus from day one has been to build an interoperable, transparent, and rapid protocol for the exchange of tokenized securities, all whilst perfecting a user experience that enables anyone to generate their own wealth. People of all backgrounds are welcome to try our platform, including technophiles, veteran investors, and speculators who were previously deterred from investing.
Investing shouldn’t be limited to particular group. Recent advances in distributed ledger technology and regulation have broken down traditional obstacles to wealth generation for the everyman. It’s time to ensure access for anyone, anywhere, and of any age to take control of their investments with bleeding-edge platforms.
As always, be sure to keep up with our developments on social media:
Website: openfinance.io
Telegram: t.me/openfinancenetwork
Twitter: twitter.com/OpenFinanceIO
Medium: medium.com/openfinance
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Juan M. Hernandez is the Founder and CEO of OpenFinance Network, the trading platform for security tokens and other alternative assets. Juan is a serial entrepreneur, technologist, and polymath experienced in financial markets, exchanges, and blockchain technology. He holds a CS degree from Northwestern University and an MBA from the Kellogg Graduate School of Management.
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