Crypto brings private markets to the public

Key Points

1. Only 4% of stocks accounted for all net returns in US equity markets between 1926 and 2019, with most stocks returning nothing.

2. Today's high-growth companies like OpenAI and SpaceX remain private, limiting public market investors' access to potential mega-winners.

3. SEC Chair Paul Atkins suggests easing IPO requirements to encourage companies to go public, but private capital abundance reduces incentives.

4. Republic plans to offer tokenized versions of private shares to retail investors, complying with current US securities regulations.

5. Republic has received $300 million in reservations for its tokenized 'mirror shares,' reflecting demand for private market exposure.

6. Tokenized shares carry counterparty risk, as they are IOUs issued by Republic, not the actual companies.

7. Historical mega-winners like Amazon and Microsoft IPO'd at much lower valuations, making similar returns unlikely from today's high valuations.

8. The SEC's accreditation rules aim to protect retail investors, but onchain private equity trading introduces new risks.