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DDIntel - Opportunity Zones

DDIntel - Opportunity Zones
By DataDrivenInvestor • Issue #7 • View online

Image via Dara Tarkowski on DataDrivenInvestor
Image via Dara Tarkowski on DataDrivenInvestor
If 2020 was the year of people being forced online, 2021 has been the year of voluntary adoption in the world of technology. Niche specializations such as cryptocurrency and AI are becoming increasingly mainstream, resulting in massive shifts in the marketplace. 
As these trends become more accessible to the average person, their momentum is only escalating, resulting in a vastly different world than the one we lived in six months ago. 
As with most knowledge brought into the mainstream, the accessible version of technological discourse comes with one major drawback - it’s focused on a rather narrow range of ideas. The average person has heard of Bitcoin and that Amazon uses AI to analyze the productivity of its employees, but that’s about it. 
Breakthrough technologies are being developed faster than ever, yet the world is focused on a few specific concepts, overlooking new technologies with a larger potential to impact daily life. 
As stories about Bitcoin driven profits languish on the front page, other developments in crypto have been overlooked. The largest gains in crypto this year haven’t been made by Bitcoin, but rather by alternative coins, many of which now have multi-billion dollar market caps of their own. 
For example, the proposed utility of Ethereum goes beyond use as a potential currency, leading some to ask if it’s better than bitcoin in 2021. It certainly has had a larger return this year, but can ETH compete with the sheer name-recognition of Bitcoin? Does it even need to?
Going beyond the increasingly traditional method of return from buying and selling crypto, others are looking into how crypto driven capital gains can be reinvested into communities through the use of Qualified Opportunity Zones - an incentive created by the IRS to “fund the development of America.”
The BitCapital Group is using these policies to help support the creation of cloud computing and crypto mining businesses across the country, resulting in a community impact driven by job creation while creating returns for investors. 
Still -  even with these developments -  not everyone has a rosy view of the societal changes being pioneered on the blockchain. Non-Fungible Tokens, one rising technology, have seen particularly vocal pushback for potentially removing more value than they create. 
Adrien Book writes that NFTs are just Another Way for the Rich to Get Richer, calling into question many enthusiast’s arguments about their potential to democratize the art market. If that ends up being true as the market grows, NFTs will be at the center of a major break from the principles that drove crypto’s growth in the first place.
When Dollars Fall From The Skies by Surajit Barua
When Dollars Fall From The Skies by Surajit Barua
Around DDI
  • After the United States Congress passed its $1.9 trillion American Rescue Plan Act, investors are growing increasingly concerned about inflation. As a record amount of money “flows into inflation held bonds,” what should it all mean for you?
  • Many investors are making a common mistake when calculating discounted cash flow, resulting in financial losses. What are they doing wrong and what should you be doing instead? 
  • As interest in the stock and crypto markets continues to increase, well-rounded investors should also consider another potential avenue of return - art. After all, returns from the art market are regularly exceeding those gained from the S&P 500. 
  • Even with all the changes happening in the modern market - the fundamental principle of investing remains the same - find assets that are undervalued and wait for the market to respond. How can you effectively do that as a retail investor? 
DDI Member's Corner
As we publish regular editions of DDIntel, we want to highlight interesting work done by members of our community - a 50k subscriber base with a million readers a month globally.
This will make DDIntel more useful, unpredictable, and collaborative!
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Thank you for reading DDIntel. We’ll be back in your inbox with more from the worlds of finance, technology, and entrepreneurship later this week! - The DDI Team
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