This week in the financial world; Larry Fink, CEO of BlackRock, one of America's largest financial institutions, predicted "the next step is the tokenisation of financial assets, and that means every stock, every bond,". BlackRock has been a leader in encouraging investment and regulation in the blockchain space. Recently, BlackRock launched the first American Bitcoin ETF called $IBIT. Now, the firm's leadership is calling for the tokenization of all financial assets, most importantly stocks. The idea of stocks trading on the blockchain has been swirling for years now, but with each passing day it gets closer to becoming a reality. Today, Overstock, which recently purchased the Bed Bath and Beyond brand and rebranded to stock symbol $BYON, is secretly leading this technological revolution in financial assets.
Patrick Byrne and the War on Naked Shorts
At the turn of the century, Overstock, an online retail store for home furniture, was born. Originally called D-2 Discounts Direct, Byrne purchased 60% equity and became CEO. He would almost immediately rebrand the company to Overstock (now Beyond, Inc.) and the company would go public via IPO in 2002. Through the following years to come, the stock would fall prey to colluding short sellers using devious and borderline illegal methods known as naked shorting, in which fake shares were being sold into market to manipulate stock price. Patrick Byrne would become one of the most prominent figures on Wall Street to combat naked short selling and Overstock would begin a campaign and series of lawsuits against the culprits.
In 2005, Overstock filed a lawsuit against a hedge fund which published negative reports on the company and shorted the stock. The fund would settle for $5 million, marking the company's first victory in its campaign against naked shorts. In 2007, Overstock filed another law suit against broker Merrill Lynch. The broker would pay $20 million to the company in a settlement. Overstock began receiving praise from retail investors and a cult of supporters began to form.
Following the financial crisis of 2008, Bitcoin was born. Alongside the birth of Bitcoin came the rise of blockchain technology. Now, assets could be "tokenized" digitally on the blockchain and be traded anonymously on the blockchain, a digital fair and secure free market. Byrne would become increasingly interested in this technology as he realized it would make naked shorting and other market manipulation tactics technologically impossible. Byrne quickly became one of the most prominent early adopters and supporters of Bitcoin. As the online retailer space became more saturated, Overstock had to innovate, and Byrne knew exactly how he wanted to diversify his business model.
tZERO & Medici Ventures: Building the Framework for Tokenized Assets
Having now established a deep interest in blockchain technology, Byrne and his company Overstock would form two new subsidiaries in 2014; tZERO and Medici Ventures. tZERO is a blockchain services company with its own SEC approved cryptocurrency exchange and token. Medici Ventures is a research, development, and investment firm for blockchain and cryptocurrency technologies.
tZERO became instantly popular amongst the crypto community and was a widely used crypto exchange in the US. In 2018, tZERO formed a joint venture with BOX Digital to develop the Boston Security Token Exchange (BSTX). The goal of the BSTX is to be the first blockchain-integrated and compliant national securities exchange. Settlement capabilities would be supported by the current industry standard Depository Trust Company (DTC). In 2022, the BSTX would receive official approval from the SEC, a breakthrough moment in the path to tokenizing securities.
As tZERO would dedicate most of its time and resources to meeting SEC regulations, Medici Ventures was hard at work developing technologies for the tokenization of assets. In 2016, Medici hired their lead developer Tron Black. Software developer Tron Black would begin his work at Medici on a cryptocurrency of his own that would seamlessly allow for the creation and transactions of digital assets.
Ravencoin
Developed by Tron Black and backed by Medici Ventures, Ravencoin is a cryptocurrency designed specifically for the creation and transactions of digital assets. The token had a surge in popularity during the NFT craze as it provided a much cheaper and faster alternative to Ethereum. Ravencoin's true purpose, however, was not for internet degens to trade their favorite JPEGs to each other at inflated prices. Instead, it was developed more so as a testing ground for what Overstock (now Beyond), Medici, and tZERO collectively believed would be the technology that changes how we trade financial assets forever.
The first real use case for Ravencoin happened in 2018 when Medici Ventures purchased 3.6 million shares of Chainstone Labs, a blockchain company, on Ravencoin. The shares of Chainstone were minted as digital assets in the Ravencoin ecosystem, and the transaction of the shares happened on the Ravencoin blockchain. In 2023, Byrne tweeted his support for the cryptocurrency, stating that Ravencoin is the only cryptocurrency he trusts aside from Bitcoin.
Today, Ravencoin is tradable on dozens of international exchanges including Binance and Kraken exchanges.
tZERO Goes to the Big Leagues
Shortly after BSTX received SEC approval, a game changing event would occur for tZERO. In February, 2022, Intercontinental Exchange Inc. $ICE; parent company of the New York Stock Exchange (NYSE), acquired a significant minority stake in tZERO. Additionally, ICE Chief Strategy Officer David Goone became tZERO's new CEO. This would be the most significant leap forward in tZERO's history, now being backed by directly by the parent company of the NYSE. This development made a clear statement; the path to tokenized securities and assets is very real.
Overstock's Rebranding to Beyond
Following the bankruptcy declared by well known home goods retailer Bed Bath and Beyond, Overstock acquired the rights to the intellectual property for $21.5 million. The company would immediately rebrand to Beyond, Inc. and bear a new stock symbol $BYON. The decision was made in an effort to immediately transform Overstock into a recognizable global brand name. Overstock's online retail model would now be implemented through the Bed Bath and Beyond brand. This was yet another step forward to bring the company into the spotlight for investors.
BlackRock Calls for Tokenization of Assets
As of 2024, BlackRock has officially launched its Bitcoin ETF and is one of the most outspoken proponents of blockchain technology on Wall Street. BlackRock CEO Larry Fink has made it clear in recent interviews the firm believes the tokenization of assets will become a reality in the near future. The ICE's investment into tZERO further reinforces this conclusion. In mid 2023, tZERO shut down their cryptocurrency exchange to focus fully on the development and launch of BSTX. How many years we have until our favorite stocks are being traded on the blockchain remains undetermined, but the future of the industry is clear.