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CVS Health Posts A Blowout Quarter; Street Says Buy

CVS Health Corp’s (CVS) 1Q results beat analysts’ expectations driven by growth in all segments. Shares of the healthcare company rose over 2% in early trading on Tuesday. CVS Health’s
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CVS Health Corp’s (CVS) 1Q results beat analysts’ expectations driven by growth in all segments. Shares of the healthcare company rose over 2% in early trading on Tuesday.

CVS Health’s 1Q adjusted earnings increased 6.8% to $2.04 per share on a year-over-year basis and beat Street estimates of $1.71 per share. Revenues inched up 3.5% to $69.1 billion and surpassed the consensus estimate of $68.29 billion.

Health Care Benefits segment recorded revenues of $20.5 billion, up 6.7% year-over-year, while revenues at the Pharmacy Services unit grew 3.8% to $36.3 billion. Additionally, the Retail/LTC segment's revenue came in at $23.3 billion, up 2.3%.

For 2021, the company projects adjusted EPS to be in a range of $7.56 to $7.68 per share, up from the prior guidance range of $7.39 to $7.55 per share. The consensus estimate stands at $7.53. Cash flow from operations is anticipated to be in the range of $12 billion to $12.5 billion. (See CVS Health stock analysis on TipRanks)

On April 14, Truist Financial analyst David S Macdonald lifted the stock’s price target to $88 (11% upside potential) from $80 and reiterated a Buy rating as part of a broader research note on Healthcare Services.

Macdonald remains bullish on the group, with expectations of strong 1Q earnings for most of the companies in the sector as a result of dissipating COVID-19 headwinds. Furthermore, amid an attractive reopening and a rebound in the economy, the analyst expects strong free cash flow for the group, with an increasing flight to quality set to further “tip the field in favor of scaled, high quality, well capitalized providers”.

The consensus rating among analysts is a Strong Buy based on 11 Buys and 4 Holds. The average analyst price target stands at $88.75 and implies upside potential of about 11.5% to current levels. Shares have increased around 28% over the past six months.

Based on 8 unique factors, CVS Health scores a “Perfect 10” on TipRanks' Smart Score rating system, which implies that the stock is expected to outperform the market moving forward.

Related News:
Microsoft Reports Better-Than-Expected 3Q Results; Shares Drop 3% After-Hours
Alphabet Pops 4% After A Blowout Quarter, Google Cloud & Ad Revenues Outperform
Apple’s 2Q Sales Pop 54% As Services and Mac Revenue Booms; Shares Gain After-Hours

The post CVS Health Posts A Blowout Quarter; Street Says Buy appeared first on TipRanks Financial Blog.

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“Diamonds in the Rough” – Last Week’s Darlings and Dud

Each week in my DecisionPoint Diamonds reports, I give readers 10+ stock picks to consider. This week, we had 11 picks. I look for stocks that are beginning to show positive momentum, bullish chart patterns, breakouts and improving relative strength among

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Each week in my DecisionPoint Diamonds reports, I give readers 10+ stock picks to consider. This week, we had 11 picks. I look for stocks that are beginning to show positive momentum, bullish chart patterns, breakouts and improving relative strength among not only the SPX, but also against its industry group.

Today, I thought I would share three of last week's "Diamonds in the Rough." I have two "Darlings" and one "Dud." They aren't all winners and certainly are not "sure things," so I feel it is appropriate to show you the trade that didn't work out.

This week's "Darlings" come from the Biotech industry group, which really broke out this week. This week's "Dud" wasn't actually too bad. It was a timing issue, but it actually looks pretty good going forward. As part of a DP Diamonds subscription, you also get entrance into the Friday "Diamond Mine" where we review in detail the "Diamonds in the Rough" that presented for the week. I also take symbol requests and we look at BUY points for symbols with promise. An added bonus is that, at the end, we "mine" for new opportunities going into next week.

Below I have the "Diamonds in the Rough" as they were presented originally, followed by my comments on the chart today.

Darling #1:

Illumina, Inc. (ILMN) - Up +4.43% since 6/9


EARNINGS: 8/5/2021 (AMC)


Illumina, Inc. engages in the development, manufacturing, and marketing of life science tools and integrated systems for large-scale analysis of genetic variation and function. It operates through Core Illumina segment, which serves customers in the research, clinical and applied markets, and enables the adoption of a variety of genomic solutions. The firm's products include instruments, kits and reagents, selection tools, software and analysis. Its services include sequencing and microarray services; proactive instrument monitoring; and instrument services, training and consulting. The company was founded by David R. Walt, John R. Stuelpnagel, Anthony W. Czarnik, Lawrence A. Bock and Mark S. Chee in April 1998 and is headquartered in San Diego, CA.

Below is the chart and commentary from Wednesday (6/9):

"ILMN is down -0.01% in after-hours trading. I was surprised I hadn't covered this one before. It's not as volatile as many of the biotechs out there. We have a nice breakout from a trading range. The breakout occurred Monday and price has held above support today and yesterday. The RSI is on the overbought side, so we should be aware of that. The PMO is on an oversold BUY signal and has now reached positive territory. There was a recent IT Trend Model "Silver Cross" BUY signal when the 20-EMA crossed above the 50-EMA. The OBV is confirming the rally and the SCTR is almost in the "hot zone" above 75, meaning it is in the upper quartile among all large-cap stocks. Outperformance is clear. I like that you can set a reasonable 7% stop."

Here is today's chart:

The biggest flaw is the overbought RSI, which is flattening out. ILMN needs to consolidate Thursday's breakout. It began to today, I still love this Biotech and you can tighten the stop more too. The SCTR is now in the "hot zone" above 75, meaning it is in the top quartile among its peers in the large-cap "universe." Also, regarding the SCTR, the calculations are heavily based on intermediate- and long-term indicators.


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Arthur Hill, CMT, is the Chief Technical Strategist and main author at TrendInvestorPro.com. Schooled in classical technical analysis, Arthur crossed over to the dark side, quantitative analysis, in 2012. Classical technical analysis provides a solid foundation for learning, but is largely subjective and discretionary in nature. Quantitative analysis puts classical technical indicators to the test with clear rules, signals and results. Taken together, classical chart analysis and quantitative analysis provide the basis for Arthur's systematic approach to analysis, trading and investing. Next level technical analysis.

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Darling #2:

Novavax, Inc. (NVAX) - Up +2.31% since yesterday


EARNINGS: 8/9/2021 (AMC)

Novavax, Inc. focuses on the discovery, development and commercialization of vaccines to prevent infectious diseases. It provides vaccines for COVID-19, seasonal flu, respiratory syncytial virus, Ebola and Middle East respiratory syndrome. The company was founded in 1987 and is headquartered in Gaithersburg, MD.

Here is the chart and commentary from Thursday (6/10):

"NVAX is up +0.16% in after hours trading. I covered NVAX as a Reader Request on July 30th, 2020. It hit its 9.2% stop when price dropped in August, so the position would be closed at this point. However, I like it today given the improvement in the Biotech space and knowing that this one is a leader based on the 98.9 SCTR. Today, price pulled back toward the breakout point. This took the RSI away from overbought territory. The PMO shows no damage and is now rising in positive territory on an oversold crossover BUY signal. Volume is coming in and, despite the pullback, the OBV didn't sustain much damage either. The stop is set below the August 2020 top."

Below is today's chart & commentary:

The trade still looks good and it isn't too late for entry. The RSI is positive and not overbought. The PMO is rising strongly on a BUY signal. Most interesting is the nearing of an IT Trend Model "Silver Cross" BUY signal, which will be triggered when the 20-EMA crossover above the 50-EMA. Join me in the free Trading Room on Monday and we'll explore the best BUY points! Register HERE if you haven't already.



Dud:


Dycom Industries, Inc. (DY) - Down -2.91% Since 6/8


EARNINGS: 8/25/2021 (BMO)


Dycom Industries, Inc. provides contracting services throughout the United States. Its services include engineering, construction, maintenance and installation services to telecommunications providers, underground facility locating services to various utilities, including other construction and maintenance services to electric and gas utilities, and others. The company was founded in 1969 and is headquartered in Palm Beach Gardens, FL.

Below is the chart and commentary from Tuesday (6/8):

"DY is up +0.72% in after hours trading. I covered DY in the October 14th 2020 Diamonds Report. I didn't put a stop on the chart, but an 8% stop wouldn't have triggered even on the big gap down in November. This means that the position is up +26.7%. The end of May was killer for DY, but it is retracing the decline rapidly. The first of two gaps has now been covered. Today's rally pushed DY above the 20-EMA. The PMO had already begun to curl upward. The RSI isn't positive yet, but it is on its way. The industry group is outperforming the SPX and DY is outperforming both. The stop is set below the gap, right around the 200-EMA at $77.28."

Below is today's chart:

While a lot of things went wrong on this chart, everything still looks bullish, especially after today's strong rally. A short-term flag has formed. The PMO had a positive crossover today. The RSI is still negative, but it is rising again. The timing was just off for it to look good this week. However, if we revisit this chart later, I expect that flag will have resolved upward and we'll be challenging the highs from April and May.

 Happy Charting! - Erin


Technical Analysis is a windsock, not a crystal ball.


Helpful DecisionPoint Links:

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DecisionPoint Chart Gallery

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ITBM and ITVM

SCTR Ranking


DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.

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Miami stakes the claim to become the world’s Bitcoin and crypto capital

Miami has a dynamic mayor, lots of VC money and is coming off the largest ever crypto extravaganza, but is that enough without legal clarity?
As Miami comes down from the “high” of having hosted the “largest-ever” Bitcoin…

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Miami has a dynamic mayor, lots of VC money and is coming off the largest ever crypto extravaganza, but is that enough without legal clarity?

As Miami comes down from the “high” of having hosted the “largest-ever” Bitcoin event, it seems reasonable to ask: Does the Sunshine State’s entrepot really have what it takes to become “the world’s cryptocurrency capital?” — a new role foreseen by its dynamic mayor. If not, could Miami at least become the next Crypto Valley — i.e., a cradle for cryptocurrency and blockchain innovation like the Swiss canton of Zug?

The optics certainly look good. As the New York Times noted in its coverage of last week’s Bitcoin 2021 gathering, “The city has gone full crypto,” with Bitcoin ATMs sprinkling Miami’s Wynwood neighborhood. Meanwhile, crypto exchange FTX has secured the naming rights for the Miami Heats arena, while there was also a proposal by Miami mayor Francis Suarez to allow citizens to pay taxes with cryptocurrency, among other things.

But others caution that a lot of hard work still awaits — and regulatory/legislative events have to take a favorable turn before Miami can lay claim to being the capital of anything in the rapidly evolving cryptoverse.

Enabling legislation is critical

“Miami cannot do this without the Florida state legislature passing pro-crypto legislation,” Zachary Kelman, managing partner at Kelman Law, told Cointelegraph, which followed with a question about Bitcoin 2021 being a milestone event and harbinger of big things to come. Kelman answered, “Yes, but in large part due to the pent-up demand for such a conference given the crypto bull market occurring during the pandemic.”

Kelman is no crypto skeptic — quite the opposite. He belongs to the Florida Blockchain Business Association, which is actively lobbying for the necessary crypto-enabling state legislation. If that is secured, Miami could become a crypto hub, even without federal legislation, he said, because:

“Money transmission rules, which are mostly governed by state legislatures, hold the keys for crypto businesses to thrive in a particular jurisdiction. Most of the activity remains in the exchange space, followed by the growth of ‘DeFi’ projects, which also often fall under the state money transmission rules.”

Miami has other advantages over other emerging crypto hubs — even Wyoming, which already has crypto-supportive state laws — Hemang Subramanian, assistant professor at Florida International University’s business school, told Cointelegraph. Miami is an international city with a developed banking infrastructure, and many venture capitalists and high-net-worth individuals are interested in funding innovation. Moreover, “it is one the largest financial hubs in the country, with a large port and a huge expat population from South America, the Caribbean and Europe.”

Benjamin Sauter, a lawyer at Kobre & Kim LLP, agreed with Subramanian that Miami was an appealing destination and business hub “particularly as digital currencies begin to take the Latin American market by storm.” Florida also lacks a state income tax — another plus, he told Cointelegraph. But those advantages still may be unable to transform the city into a global crypto hub, even with favorable state legislation:

“Most of the serious legal work needs to happen at the federal level. Much of the current discussion focuses on Anti-Money Laundering, international cooperation and asset recovery, and tax enforcement. Wealthy individuals and companies in the [crypto] space would do well to plan for government scrutiny and enforcement measures in these areas, rather than holding their breaths for a quick fix in Miami.”

Lane Kasselman, chief business officer of Blockchain.com, which recently announced that it was moving its U.S. headquarters from New York to Miami, was understandably bullish about the company’s sunny new second home and told Cointelegraph, “Miami is already the [new] Crypto Valley, and the announcements last week prove it.” Mayor Suarez is acting as a vocal proponent for technology investment in the region, he added, and “Miami’s welcoming regulatory environment will help fuel crypto innovation.”

Miami as seen from abroad

What about the view from further afield? Thomas Nägele, an attorney who played a role in the evolution of Crypto Valley, told Cointelegraph, “I think that Miami is in a very good position to become a blockchain hub like the Crypto Valley in Switzerland and the crypto country Liechtenstein,” while adding several caveats:

“A blockchain hub is not something that can simply be imposed; it has to be supported by the community, requires a certain number of companies that are active in this area, and, last but not least, needs legal clarity.”

This last item, “legal clarity,” is of the utmost importance, Nägele stressed, and “the perfect example for that is Liechtenstein with its TVTG — also known as Blockchain Act — which provides the legal framework for the tokenization of assets.”

Ian Simpson, senior marketing and communication manager at Bitcoin Suisse AG — a company based in the Crypto Valley — told Cointelegraph, “One challenge for larger cities and countries is that crypto can be ‘swallowed up’ by the wider tech ecosystem, and this can dilute the attractiveness to blockchain projects.” He added, “Close contact and access to ideas, talent and quality services are some of the things that have made Switzerland’s Crypto Valley what it is. We’ll have to wait and see how things develop in Miami.”

When asked if Bitcoin 2021 should be viewed as a milestone event for the crypto and blockchain space, Simpson answered that while it was a welcoming event, particularly after all the lockdowns of the past year, “It does not seem to have marked any significant change or development in the community — and as we saw it had absolutely no effect on the markets.”

Nägele, for his part, called it “a pity” that most European countries were on a quarantine list and were unable to join the Bitcoin 2021 gathering, “but what my friends were telling me, it was an amazing event, and this is always a good start for an ecosystem.” While Kasselman commented, “There’s no question we’ve reached a critical inflection point where crypto has moved from niche to mainstream,” he further explained to Cointelegraph:

“What’s notable is that the conference wasn’t just about Bitcoin, it was about the ecosystem: From DeFi to NFT to SushiSwap. Crypto is an industry, not just a [single] highly valued token.”

A new center of gravity?

Overall, is it even possible to identify the crypto/blockchain world’s nerve center, and if so, could it change? It may shift from time to time, said Nägele, “depending on where attractive conditions exist for the relevant companies. Europe and especially Switzerland and Liechtenstein were certainly early adopters, and recently, Asia is catching up. I really look forward to welcoming Miami to the club, but finally, I hope that we consider the world as the crypto hub.”

Simpson added, “The U.S. has a strong position in the blockchain and crypto space by virtue of its lead in technology and with the recent IPO of Coinbase. However, Europe and Switzerland seem to offer more openness on the regulatory side, and the Asian ecosystem also has a great deal of weight by virtue of scale.” But it is still difficult to point to a single center of gravity in the blockchain ecosystem, he added.

Related: The female speakers who made an impact at Bitcoin2021 in Miami

“While the U.S. and Europe get much of the press, Latin America and Asia show the fastest retail user growth,” added Kasselman. “It’s likely as crypto becomes more ubiquitous across financial services, we’ll see emerging markets accelerate adoption for the core products, and mature markets grow their usage of the expanding crypto ecosystem.”

“I think Miami could easily be the American capital of crypto if it isn’t already,” noted Kelman. “However, without federal legislative support, it is impossible for Miami to become the international crypto capital,” and recent signs “point to more onerous federal legislation rather than crypto-friendly laws in the near term.”

Subramanian said that regulation always follows innovation, and “in a democracy, the people’s ‘will’ will eventually play out.” That is, the requisite state and federal legislation will come eventually. “If Zug in Switzerland can become a crypto-blockchain haven, Miami can too. It is more diverse, more international, and much more capital-friendly,” he added.

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We’ve passed peak corporation already — Michael Anderson, Framework Ventures

The pandemic has changed society forever and in many cases, not for the better. But when historians look back in a few decades, will they see this period as a turning point in the transition from an economy dominated by corporations to a new crowdsourced

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The pandemic has changed society forever and in many cases, not for the better. But when historians look back in a few decades, will they see this period as a turning point in the transition from an economy dominated by corporations to a new crowdsourced model where participants are incentivized with tokens to grow a project and share in the profits?

It may sound far-fetched given that mega-corporations dominate the present reality, but imagine a world in which Uber drivers and their passengers own and operate a decentralized rideshare network. Or one where Airbnb property owners, guests and even the cleaning staff share in the success of the cooperative business.

What has happened over the last 10 to 12 months would have probably taken 10 to 12 years had it not been for the pandemic, explains Michael Anderson, co-founder of Framework Ventures. A VC fund, Framework Ventures has raised $115 million for two investment funds and is a major DeFi player, getting in early on Chainlink, Synthetix and Yearn.finance.

Anderson says the concept of a decentralized collective effort has become normalized by working from home.

That kind of concept of working for a company where you show up every day, and there’s an office [] that’s kind of been broken down, he says. It forces people to have questions as to do we need that going forward?

The Uber as a Decentralized Autonomous Organizations (DAO) concept has been around since at least 2016 when blockchain project Arcade City started talking it up in the wake of a successful fundraise for the ill-fated The DAO. However, it’s now finally beginning to capture the zeitgeist. This month alone, Bankless co-founder David Hoffman wrote a long discussion on the topic called The Future of Work, and Bloombergs Joe Weisenthal touched on it in his Theres a New Vision for Crypto piece. Meanwhile, tech billionaire Mark Cuban tweeted at the end of May that DAOs taking on corporations was the ultimate combination of capitalism and progressivism.

 

 

The DeFi sector has been at the bleeding edge of the rise of DAOs and Digital Organizations (DOs), which are similar but are less governed by code and arent autonomous. They enabled a cooperative model and collective ownership of protocols, becoming popular in DeFi as a form of governance and as a way to crowdsource development.

Yield farming may have begun life with a poor reputation as guerilla marketing-meets-Ponzinomics, but it quickly became clear it was a great way to reward the most active participants in a community with tokens and often a share of the revenue. In turn, this incentivizes the best participants to help grow the protocol, bringing ever greater numbers into the project.

That ownership element is what has the power, explains Anderson. And the best communities are the ones where you’ve got the earliest adopters, brought in from the get-go, and they become your biggest supporters, they become customer support, they become business development.

Thinking bigger

If it works in DeFi, theres no reason it cant work in other industries and economies. Any marketplace could potentially benefit, and that doesnt mean simply tokenized versions of eBay or Uber. Anderson uses the example of a clothing production line in which the sourcing of materials, the creation of clothing, distribution and sales could all be incentivized and organized through this new model.

I think what we’ve seen over the last few years is a peak of corporations. And what I think we now have with the formation of DAOs is almost as a replacement for a limited liability corporation or a corporation in general, he says. It’s a replacement of incentivization layers, like equity and stock options, with tokens.

It’s mostly DeFi, but expanding beyond that, I think you can start to take this model into any marketplace. I think it ultimately becomes a really unique way of incentivizing participation.

 

 

The model has plenty of advantages: being decentralized means that anyone, anywhere in the world who has an idea for building on top of the protocol or who figures out a better way to do something can jump in and reap the rewards. The process of iteration and evolution speeds up, too. No longer must you wait for the grinding gears of a corporation to grudgingly accept a new way of doing things. It simply happens via an efficient competition that produces the best outcome for a collective.

Ultimately, that makes things more efficient and scalable, but also more fair and open, Anderson explains, adding that it enables anyone, anywhere, to compete with tech entrepreneurs in San Francisco or Silicon Valley, who previously had the advantage of being in close proximity to capital.

Breaking down those walls is really exciting, for the future of the world, but also the future of work.

Community ownership, I think, is a fundamental difference and a fundamental innovation, he says. And that’s why I love tokens. It is a completely new design space; were just scratching the surface as to how we can use these in different and novel ways.”

More equitable than equity

In a way, DAOs and DOs are a modern spin on older concepts around partnerships, co-ops and collaborations, made a thousand times more efficient by technology. And while our mental models for this sort of ownership currently look a lot like handing out equity, Anderson expects that to change as the use of tokens grows and evolves.

According to Andersen, having a clear vision of the future or a strong thesis about how things may evolve in the future is one of the things that separates Framework Ventures from many other investors in the space. Unlike the short-term, price-oriented thinking that predominates in crypto, Anderson and co-founder Vance Spencer believe in looking at where digital finance is headed over a timeframe of five to ten years and place their bets accordingly. They are popular guests on DeFi-themed podcasts as a result of their inspiring and well-reasoned thoughts about the future.

Frameworks first big success came before theyd even formalized the fund, with Anderson and Spencer developing a thesis around the need for smart contracts to access secure, reliable real-world information, which informed their investment in decentralized oracle network Chainlink:

Mass adoption of interesting smart contracts will require data feeds that are secure, external to the blockchain (i.e., interest rate data from a bank), and maintain privacy when incorporated into a smart contract. Data feeds that meet these conditions are not currently available.

Their investment thesis which my short summary cant really do justice paid off well. Anderson brings up the example of Don Valentine, the late venture capitalist who founded Sequoia Capital, who invested in Apple after having a similar epiphany that personal computers would one day be in every home and on every office desk. This is the secret to successful VC investing, Anderson says.

Finding the pieces that fit into that vision and into that new world, I think, is actually the easy part, he says. The hard part is being able to discern, you know, what that future state looks like.

A long time ago in the startup world

Anderson grew up in Palo Alto, California, the epicenter of the startup world, and attended Yale University in Connecticut. He was planning to study electrical engineering or computer science and play college football. But in September of his freshman year, the fourth-largest investment bank in the United States Lehman Brothers collapsed and filed for bankruptcy. That event led to his fascination with finance and his degree in economics and computer science.

In the aftermath, hed hear firsthand accounts of the turmoil on Wall Street from the family members of his friends, and hed pore over reports in the New York Times and WSJ. He learned about the intricate and arcane nature of mortgage-backed securities and collateralized debt obligations.

Once you start to really dive into how in-depth and complicated it gets, I don’t think there’s anyone that actually understands the entire system, he says. You could spend a lifetime trying to figure it out. He gravitated towards fintech as a potential solution.

Software is the eighth wonder of the world in my mind. How can we build software that expedites or emphasizes the power of finance?

He was initially torn between pursuing a career in technology or finance and dabbled in both. While interning at Apple in 2011, he was dismayed to discover a company that creates such elegant products was organized like a stodgy kind of corporate opaque institution, in which even many of the department heads didnt know what product was launching next. He realized he was unlikely to make an impact there.

Anderson also spent three months as a summer analyst at Barclays Bank, where he researched companies considering going public like GoPro and Dropbox.

I was tired of covering them, and I realized that I just wanted to go work for them, he explains. And so that’s ultimately what led me to Dropbox.

He spent three years at Dropbox and another two at Snapchat, mostly in the role of product manager. There he learned how to take an idea from conception to production, keeping users needs in mind as the product scaled up to millions. This knowledge would later prove to be a key experience in how he approaches the growth of crypto networks, none of which yet operate at consumer tech levels.

Despite mining Bitcoin during college, Anderson didn’t truly fall down the crypto rabbit hole until he read the Ethereum white paper in 2015 and a light went off in his mind. Shortly afterward, when he was moving to Los Angeles to work for Snapchat, a friend sent him on a blind roommate date with Vance Spencer, then working for Netflix. The pair bonded over Ethereum pretty much from question one.

Our kind of friendship grew very, very quickly. We started to have an informal investment partnership together, where we were looking at different angel opportunities, and it just kind of grew from there.

Top Shot in all but name

Its one thing to develop a clear vision of the future, and its another to profit from it. As with most things, timing is everything. Unfortunately, Anderson and Spencer were about three years ahead of the market in 2017 with their first venture, Hashletes, essentially an NFL version of the outrageously popular NBA Top Shot.

Collectible NFT player cards enabled users to enter fantasy football games and win prizes. One of Anderson and Spencers contentions about NFTs, which were only starting to see come to fruition in 2021, is that NFTs need to have utility as well as provide digital ownership.

Hashletes was the first app in the iOS store connected to Ethereum, but the project only lasted a season and a half, killed off by high licensing fees and a lack of interest or understanding about NFTs at that time. Anderson and Spencer sold the business to a sports holding group in New York.

It’s definitely hard to push something, especially when you know that this idea should be working but the infrastructure, the technology just isn’t there, he says. [American entrepreneur] Marc Andreessen has said that there are no bad ideas, it’s just the wrong time. So, there’s a little bit of that. You know being too early is also the same as being wrong.

I’d say we definitely built our empathy toward entrepreneurs in the space. And that’s what gave us a lot of the insight into how we wanted to build Framework and why we wanted to build Framework.

Given the newfound interest in NFTs this year, Framework Ventures is once again pursuing the space.

The pairs template for success was created with their initial investment into Chainlink when it cost 11 cents during the ICO in 2017. Andersons investment thesis is still online, explaining why they had a price target of $10$20 for the 11 cent token. Its already blown past that: At around $25, the token represents a more than 22,000% return in about three years.

We made probably 20 to 25 different investments as angels prior to starting Framework, but Chainlink was definitely the best performing out of those. But I think it’s the one that we have the most close relationship with, just because of the breadth with which they can expand into all the different industries.

 

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They formalized the partnership afterward, with the Link investment leading to many more, including Aave, dHedge, Synthetix, Yearn.finance, Dodo, Edgeware, Fractal, Futureswap, Kava, Pods, Primitive, Teller, The Graph and Zapper. It’s how we’ve got to know all these other teams. Chainlink oracles are usually the commonplace choice,” he says.

The importance of community

Another premise is that in a decentralized, open-source world in which any protocol can be cloned and see its liquidity siphoned off its the quality of the community around a project thats more important than almost anything else.

The community is something that has the real kind of defensible moat, he says. And so community development for us is paramount. We like to say, you can evaluate the team, you can evaluate the product, you can evaluate the market, but the most defensible elements of any investment are going to be the core team and then how that transitions into the community and community ownership.

Rather than mere investors, theyre active participants in the community, too, if highly influential and cashed-up community members. A sister entity called Frameworks Labs has 17 software engineers building tools and systems to increase growth and engagement for projects they’ve invested in.

We’re one of the larger Chainlink nodes in the network. We’re one of the larger Graph nodes. Were active traders if we’re investing in an exchange, liquidity providing, he says. It just means that we’re rolling up our sleeves being one of the larger users, one of the largest suppliers for most of the investments that we make; its kind of how we define our edge.

 

 

Anderson and Spencer see this as a perfect alignment of interests, and its why this new decentralized organization model can take some of the power back from the tech monopolies and corporations that dominate everyday lives.

Back when the internet began to spread, utopian visions of its potential to democratize the world and give the power back to individuals dominated. What actually happened, of course, was the development of addictive algorithms, filter bubbles and cancel culture, thanks to tech monopolies like Google and Facebook.

It might be another utopian vision, but perhaps the DeFi/Web 3.0 model can succeed where the internet failed. Anderson points out he used to live just down the street from Google. He says, Google had this famous line of: Don’t be evil. Well, blockchains enable something even better, which is: ‘Can’t be evil.

“When you build cryptographic guarantees around transparency and decentralization, you know, there isn’t the ability for a corporation to extract value in the same way.

Radical transparency means the best projects with the most well-thought-out incentives will attract the sharpest minds, and those that hold 50% of the tokens back to dump on retail in the future will get shunned.

I think you don’t really get that far with those types of models because everything is transparent and the incentives are aligned with the users of the product, the users with the networks, more so than anything I’ve seen in the previous tech generations.

 

 

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