Blockchain Front Page: Is this end of Bear market or Bull trap?


Last week our theme was “Can Regulation drive the next Bull Market?”

Our theme for this week is “Is this end of Bear market or Bull trap?

All week long, Bitcoin’s price has been on the rise, giving hope to investors that the bear market could finally be over. In the last twelve months, Bitcoin’s price has been dropping, to as low as $3,000 per coin.

Breaking the $4000 price mark for the first time in months, has had a significant psychological impact on the crypto market. For most of 2019, the price of Bitcoin price has been hovering around the $3,600. On Saturday, Bitcoin climbed from $4,028 to over $4,100. Along with Bitcoin, just about every coin joined the rally. Ethereum jumped by 6.05%, Ripple (XRP) by 1.89%, EOS by 6.02%, Litecoin by 4.65%, Bitcoin Cash by 3.87% and Stellar by 3.92%.

This recent and sudden price jump, comes after some positive stories, floating in the news.

Earlier this week, Samsung confirmed that its flagship Galaxy S10 smartphone will feature an integrated secure cryptocurrency wallet. Currently, HTC’s Exodus 1 and Sirin Labs’ Finney also offer crypto storage features, but Samsung is the largest phone manufacturer to add crypto-storage options to its phones. Samsung’s new phone could give a boost to Bitcoin’s adoption.

Comments by tech heavyweights, Elon Musk, Jack Dorsey, and Chinese billionaire, Zhao Dong and recent news about J.P. Morgan’s new cryptocurrency, are also some of the reasons Bitcoin has shown signs of recovery.

CEO’s of Tesla and Twitter, recently suggested that cryptocurrency, especially Bitcoin, as the potential to change the world. Their comments gave hope to the market.

Bitcoin billionaire Zhao Dong, said the crypto spring will come in 2020“In the bull market, I don’t persuade people to buy Bitcoin, because it seems easy to make quick money but in fact it is not. Now in the bear market, I start to talk people into buying Bitcoin.”

While, Jamie Dimon, J.P. Morgan’s CEO, has bashed Bitcoin in the past, the bank’s chief has consistently said regulated digital currencies hold promise. The “JPM Coin,” a digital token that will be used to instantly settle transactions between clients of its wholesale payments business. Only a tiny fraction of payments will initially be transmitted using the cryptocurrency, but the trial represents the first real-world use of a digital coin by a major U.S. bank.

Earlier this month, Morgan Creek raised a $40 million cryptocurrency fund, backed by public pension funds. Eurex, a Germany-based derivatives exchange operated by Deutsche Boerse, is planning to launch futures contracts tied to digital assets such as Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP). The University of Michigan’s $12 billion endowment plans to bolster its investment in a “cryptonetwork technology fund”,  managed by American venture capital firm Andreessen Horowitz.

Digital behemoths that dominate the web are beginning to make moves in the crypto market. Facebook went from a complete ban on token related ads to developing its own stablecoin. While it has not been confirmed yet, the key focus of the token may be to enable remittance to and from developing nations with an integration into WhatsApp and FB Messenger. The Chinese government has partnered with Tencent on creating a blockchain security alliance along with 20 other public and private institutions to reduce occurrences of fraud, pyramid schemes and illicit financing in the blockchain space. AWS announced the launch of Quantum ledger services and managed blockchain implementations. The system currently offers one click solutions for launching private implementations of Ethereum and Hyperledger.

With all the positive developments, since the beginning of 2019, many are wondering if we’re seeing the beginning of the next Bitcoin bull run. For the first time after after 40 days, Bitcoin hit $4,010 on Tuesday. The trend is backed by an increase in transaction volumes, last seen nine months ago, in May 2018,. The increased volume, could mean that we will see continued gains for cryptocurrencies in the short-term.

This recent rally could be signaling the end of the bear market, that started in early 2018. We are still very early, with only 3% of the world owning cryptocurrencies. Imagine what’s going to happen when mass adaption comes along, and when everyone has a crypto wallet on their Apple and Samsung mobile phones.

Its difficult to imagine how a world with cryptocurrencies will actually develop, just like we couldn’t see how the Internet was going to change our lives, in the mid 90’s.

Whether the bear market is over or not is only a matter of time. In the future, you can expect prices to go much higher than their all-time high, in December 2017. The only thing you need is patience.

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Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Weekly Front Page each Monday.

China’s Social Credit Score – Economic Genius or Killer of an open society?

I am in the London underground, and my mobile tells me if the person sitting next to me has defaulted on their loans. I can now decide if I still want to sit next to them. – Imagine a world where that could be true

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I am trying to book a Eurostar holiday, and I get told on their site that, I can’t travel on Eurostar because I missed my credit card payment last week – Imagine a world where that could be true.

I walk into a Starbucks and I get a free drink because my mortgage payment was done on time – thanks to my direct debit. I could go on, but you get the idea.

China is working on a Social Credit Scoring system that could pretty much make life look like what I have described. For me, it’s too intrusive. But in a world (within China) where Google has a single digit market share, thanks to censorship, nothing is intrusive (looks like).

The Chinese government claims that it needs the system to promote social and economic trust, and plans to launch the system by 2020. No wonder, China tops the world in AI patents. They are already piloting the system in several Chinese cities.

“allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.”

– From the founding document of the social credit scoring system

The government’s drive to get the social credit score underway is largely inspired by existing private setups like Sesame credit. Sesame credit is the credit system created by Ant Financial. Ant financial and Tencent have managed to create a universe of consumer data through their ecommerce and messaging offerings. And they leveraged that data to provide a wide suite of financial services. The worrying aspect is that the government’s credit scoring initiative may tap into this data.

Economists highlight that China’s growth, at least when compared to its neighbour India, has slowed down. It may not mean much at this point as China’s economy is almost 4 times bigger. But the slowest growth rate in 30 years is something that has got the government thinking.

South East Asian countries like South Korea struggled to transition from input based growth to productivity based growth. In China’s case, the labour force has maxed out, and now they are focused on driving productivity. Is this social score system designed to make people more productive?

In a survey conducted last year by a European researcher, 80% of the respondents voted in favour of this system. The challenge is that the social credit scoring system has a good chance of making the rich – richer and the poor – poorer. Getting on the economic ladder would be harder for the bottom of the pyramid. However the Chinese government chooses to look at it differently.

Keeping trust is glorious and breaking trust is disgraceful

Just that line sounds so binary and feels mutually exclusive and is an antithesis of an open society. Then there is this philosophical argument of what’s more important? An egalitarian society where privacy is respected, or an ethical, moral, compliant and conformed world. There is no binary answer to that either.

Only time will tell if this system delivers the desired outcome – at least in a Chinese sense. Watch this space.

Our “before it is news, you can read about it on Daily Fintech” Retrospective of nearly 4 years of Insurtech insights on Daily Fintech


We initiated our weekly Insurtech coverage on Daily Fintech with a post on 25 March 2015 entitled Not that many Insurtech startups – yet. This lede gets a high score nearly 4 years later:

“InsurTech is not as developed as other parts of the Fintech market. It feels more like Fintech around 2011, when a lot was happening but few people were observing what was happening.

InsurTech could develop at a faster pace because a lot of people who missed the rise of Fintech want to make sure they do not miss the next big market opportunity. The explosion of Social, Mobile, Analytics and Cloud (SMAC) technologies means that startups operating at the top of the stack – at the application layer – can often get tremendously rapid traction.”

Journalists in the UK like to keep the news cycle in perspective by saying “today’s paper will be tomorrow’s fish & chip wrapping” (translation, fish & chip takeaways in the UK were wrapped in newspaper).

Our mission at Daily Fintech is to anticipate the news cycle and sometimes we get it right and can make the claim that  “before it is news, you can read about it on Daily Fintech”.

The reason we can occasionally do this is because what we seek what investors seek – information that is both contrarian and true. Both need to be right for an insight to be valuable. In order to not get into NDA or Insider Trading hot water, the base data must be in the public domain.

For this retrospective I searched through the Insurtech archives to find more posts that meet that tough test:

The Jarvis Smart Helmet IOT Insurtech From Taiwan Is Another First The Rest Then The West Story.

Silicon Valley Gets Amazoned In Insurtech.

ReFocus The Life Insurance Conversation Around The Impending Longevity Change

How Blockchain Could Finally Enable The Vision Of User Controlled Electronic Health Records.

Blockchain Enabled Insurance Creating Waves In The Maritime Industry.

China Is The Global Insurtech Ecosystem Sandbox

Helping rather than replacing the Insurance Agent may be the #Insurtech game plan

Microinsurance Is Insurance For Emerging Customers And It’s A Huge Market Opportunity

Customer Onboarding Is An Easy UX Trick For Insurtech But Claims Processing Requires Some Hard AI Tech

We Interview Joe Taussig To Learn How Warren Buffet Uses Insurance And How You Can Copy Him

Strong User Authentication Could Enable Big Companies To Get Insurance From Cyber Crime.

Root Insurance And The Super Fast Unbundling Of The Insurance Stack.

There are nearly 200 Insurtech posts in our archives, so picking only 12 was tough.

TL:DR. Subscribe to get these insights as they get published every Thursday, so you can get ahead of the herd.

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Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is the author of The Blockchain Economy and CEO of Daily Fintech.

Check out our advisory services (how we pay for this free original research).

To schedule an hour of Bernard’s time for CHF380 please click here to send an email.

Listings Ledger offers valuation elixir for SMEs

Ask any small business owner raising money what the most non-transparent and contentious part of the process is, and they’ll most likely tell you it’s setting the valuation.

Navigating the valuation valley of death is more an art than a science, those who have traversed it will tell you – a rather ironic statement considering it’s a financial output. But like Mr Market and his infamous irrationality, valuations also have their own emotional drivers, often deeply disconnected from value.

But in a world of cloud accounting, discounted cash flow models and ‘AI’, does it have to be this way? Surely there is a rational panacea to all this hard thinking, competitor research, rumour and valuation innuendo founders have to grind through with investors and financiers?

Well, if the practical Scots have anything to do with it, a valuation elixir may be on the horizon for the weary founder community.

Listings Ledger, a spin out from the University of Strathclyde claims its patent pending real-time company valuation technology will help smaller firms access corporate finance by providing more transparency and rigour and less manual calculation. The platform crunches data from Companies House and stock market financial data to calculate an up-to-date valuation.

An on point, no-debate-to-be-had-here valuation is a big promise, and no doubt there is a lot more to the secret sauce than just what’s been talked about in a few press releases to date. For example, how are new companies that don’t have listed stock market peers treated, or private company competitor data analysed and factored? And, at the end of the day, isn’t price just a reflection of opinion – how is this accounted for?

Having both raised money to fund a business and used secondary markets for buying and selling unlisted shares in small companies before, there is no question that technology like what Listing Ledger proposes could go a long way in making it easier for parties on all sides of the financing table. But getting those involved to ‘buy’ into the process and put all their pre-conceptions aside about how a business should be valued may be the hardest thing of all.

Then again, I did read the Holy Grail itself is rumoured to reside in Scotland, so perhaps its birthplace gives Listings Ledgers all the location ‘edge’ it needs. Now that would make a great marketing campaign.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

A world of #WhenBinance & #WhenSIX

Stock Exchanges are the fastest and most efficient data-processing large scale system that we humans have designed so far[1].

Stock exchanges need roughly 15minutes of trade to determine the effect of a piece of news – political, scientific, ecological, societal etc – on the prices of shares.

DLT technology may change this but the How is up in the air.

In Stock exchanges and listed assets  – Part I I looked at Nasdaq`s use cases. In this second part, I am sharing insights on the pulse of the securities markets as they reshaped and get pulled (down or up) by DLT technology. As mentioned in the Foreword of the SIX white paper The Future of the Securities Value Chain, one of the reasons to look into this topic is to sharpen our understanding of what the relevant future may look like and to seek feedback and open a conversation.

With DLT technology there will be a boom in what is tokenized or securitized in traditional parlance. There is no disagreement on this front, just on the degree maybe and the when. However, the devil is in the details as always. How will this happen?

If we all agree that there will be more securities out there, what will happen to Primary markets, Secondary markets and the post-trading processes? The 64page SIX white paper, describes eight possible scenarios with enough details – as they know how these markets operate currently – and in their Summary two pager they pick the two most likely ones. Of course, opinions will vary on the likeliness and this is where it gets interesting.

The way I see the world right now, is that

we have moved from #WhenMoon #WhenLambo to a world of #WhenBinance.

Even at LyCI online webinar presented by Richard Olsen, CEO of Lykke, the question of #WhenBinance for LyCI, was asked. Day traders and speculators naturally want listed assets but through the accelerated evolution of digital assets over the past two years, we have actually realized that investors also continue to attribute value to the listing of an asset. #AndTheIrony is that this signaling effect comes from the conventional investment culture and Not from the P2P progressive culture that Satoshi Nakamoto made technologically possible.

#AndTheIrony is that for now, both retail and institutional investors in the digital assets world perceive listing as a measure of fundamental quality. Whether it is about cryptocurrencies, utility and payment tokens, asset-backed coins (commodities, real estate, revenue sharing), security tokens etc. listing makes them more valuable.

The way we are plowing ahead to increase adoption of digital assets, we are consciously or unconsciously, making sure that LISTED ASSETS WILL CONTINUE TO BE THE DOMINANT STRUCTURE IN SECURITIES MARKETS.

In such a world, we could see growth in issuing marketplaces for digital assets of all sorts, but continuously tied to the new digital exchanges. As we speak there are several issuing marketplaces launched for digital assets: Securitize, TokenSoft, Neufund, Desico, Mobu, …. And more than needed exchanges to list these assets. At the same time, incumbents like SIX and Nasdaq, are building infrastructure to prepare for a position in the digital assets boom. Most, if not all, of these initiatives, will deploy permissioned central ledgers that deviate from the Satoshi Nakamoto core principals.

Right now we are heading straight into a future for securities that is based on permissioned central ledgers and in which listed securities remain the only way to unlock full value and then some. We will have reduced costs, reduced intermediaries, a larger pie of digital assets but we will have not changed this:

Exchanges will remain the fastest and most efficient data-processing large scale system that we humans have designed.

A Satoshi Nakamoto fully aligned world, is one in which exchanges disappear simply because listing does not add value. In such a world, all issuing marketplaces are open and not permissioned. Issuing becomes ubiquitous. Imagine a world in which either on Amazon or Wechat, even retail can issue a security or a token, and investors can directly access these. This requires to move Fintech crowdfunding venues like Angelist and Crowdcube, and P2P lending venues like Prosper and Lending Club, onto protocols like Harbor, Dharma, or Swarm. Then to get all large corporates (BMW, Johnson & Jonhson, ect) the software to issue and trade P2P within their ecosystems – i.e. DEX software. But before all this can happen, we need to solve the Digital Identity issue for both individuals and entities.

In a Satoshi Nakamoto fully aligned world, Exchanges become obsolete.

[1] The view of the Austrian school of economics

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Blockchain Front Page: Can Regulation drive the next Bull Market?


Last week our theme was “Security Tokens take center stage”

Our theme for this week is “Can Regulation drive the next Bull Market?

Bitcoin has been in the longest bear market in its 10-year history. In 2013, the crypto market had 410-day bear market, when the Bitcoin price dropped from around $1,100 to nearly $200.


In 2017, cryptocurrencies experienced their greatest bull market ever. Bitcoin’s price surged from less than $1,000 to $20,000, while other major cryptocurrencies recorded 200x gains in the same 12-month period.

But in 2018 we saw a complete reversal, with bearish sentiment across the board and not just for Bitcoin. Investors in other cryptocurrencies, like Ethereum, and Ripple, also lost huge amounts. As a whole, the market lost 86% of its market cap, since its all-time high, causing many casualties and startups like ConsenSys, STEEM, Ethereum Classic, and NEM failing to achieve predicted returns.

The market was affected by regulatory news, mining and scaling difficulties. Investors that entered the market during the hype, recorded substantial losses in a short period of time.

While analysts and traders think the current bear market will continue throughout the first half of 2019, they expect the market to recover.

One piece of the news that makes me optimistic about the market’s recovery and for the future of Bitcoin and other cryptocurrencies is that Bitcoin is fully or partially legalized in 111 countries.

Recently, Coin Dance reported that Bitcoin was legal in 111 out of 251 countries and it was only illegal in the following ten countries: Afghanistan, Algeria, Bangladesh, Bolivia, Pakistan, Qatar, Republic of Macedonia, Saudi Arabia, Vanuatu, and Vietnam. Still, there aren’t many countries that have legitimized Bitcoin by declaring it legal tender and only one to do it, is Japan.

The United States has taken a positive stance toward Bitcoin, to prevent or reduce Bitcoin use for illegal transactions. Yet, there is also plenty of confusion and uncertainty, whether cryptocurrencies will regulated by the federal government, by states, or by an agency such as the SEC. Individual US states seem to be in competition for the title of the most crypto-friendly. While the Commodity Futures Trading Commission (CFTC) treats crypto as commodities, the Securities and Exchange Commission (SEC) insists they are securities, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) applies currency rules, and the Internal Revenue Service treats digital money as property.

While, the European Union (EU) has followed developments in cryptocurrency, it has not issued any official decision on legality, acceptance or regulation. In the absence of central guidance, individual EU countries have developed their own Bitcoin stances. A little over a month ago, two of the largest banking regulators within the European Union released reports calling for uniformity in the regulations of crypto assets and Initial Coin offerings (ICOs) across the continent. Germany is open to Bitcoin. While it’s considered legal, it is taxed differently, depending if you’re an exchange, miner, enterprise or user. The UK has a pro-Bitcoin stance and wants the regulatory environment to be supportive of the digital currency. In Cyprus, Bitcoin is not controlled or regulated and Malta has passed several laws crypto friendly laws.

In Japan, the Financial Services Agency, may have the best oversight on cryptocurrency exchanges, mandating increased security measures and suspending operations when necessary. The FSA has also created an industry study group for the cryptocurrency exchange industry.

South Korea is one of the largest crypto trading ecosystems in the world. In an effort to combat money laundering, in 2018 it banned anonymous trading and increased oversight on exchanges.

Australia considers Bitcoin a currency like any other and allows entities to trade, mine, or buy it and is not subject to double taxation. Currently they are debating a bill to apply AML to exchanges and prosecuting exchanges without a license.

China is perhaps the most famous example of a harsh cryptocurrency crackdown. Bitcoin is essentially banned in China. All banks and other financial institutions like payment processors are prohibited from transacting or dealing in Bitcoin. The nation’s authorities previously banned ICOs and cryptocurrency exchanges. In July 2018, state-run media in China reported that Bitcoin trading using the country’s national currency fell to less than 1% of the international total from a peak of more than 90 percent.

In Russia, Bitcoin is not regulated, and its use as payment for goods or services is illegal. The country’s financial regulator is working on cryptocurrency laws to protect individuals from cryptocurrency scams, while allowing businesses and individuals to work legally with cryptocurrencies.

Regulatory direction can give much needed certainty, help markets stabilize and drive wider participation, from investors that waiting on the sidelines because they fearful of the current levels of risk.

While we are seeing regulators around the world working on legal frameworks for crypto, the process is slow. The crypto market is down, because regulations are just beginning. Crypto’s greatest problem is also its greatest advantage: It’s brand new and everyone is trying to figure out how to regulate it. Once exchanges are standardized and offer more fiat on/off ramps, investors will be able to easily diversify their portfolios,  without worrying about losing everything at the sign of a bear.

For more about the Front Page Weekly CXO Briefing, please click here.

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Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Weekly Front Page each Monday.

The Return of Crypto DeQuorum – JPMCoin the XRP Killer

After a busy day, I sat down to have a late lunch at 3 PM on Thursday, and I saw a Whatsapp message pop up – and I stood up from my chair saying “Ohhh Ehhmmm Geee”. That was my reaction when I heard about the news of the JPM Coin. Of all the banks, JP Morgan led by Jamie Dimon had to be the first mover to launch their asset backed crypto. It is less than 2 years since Jamie Dimon called Bitcoin a big fraud.

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Will this bring back some decorum into the crypto world? Will this kill Ripple’s XRP? My head is abuzz with all these questions, so bear with me as I manage/struggle to lay them out.

The crypto world can do with some positive news and sanity as there is a sense of the crypto winter coming to an end. As much as I loved to hear the news, and was glad for the crypto industry as a whole, I felt for some of the early adopters of the technology. There is a good chance that we will see a BarcCoin, CitiCoin, GSCoin, and so on, with similar working models. There is more than a chance that we will see some existing players disappear. Let us quickly visit the salient features of the JPM Coin model.

  • It will use the Quorum Blockchain developed by JPM. It provides for
    high speed and high throughput processing of private transactions within a permissioned group of known participants
  • It will be a stable coin, whose value will be always $1 USD – so market volatility linked with Cryptos is mitigated.
  • It will be used for wholesale payments that JP Morgan processes, estimated at ~$6 Trillion per day.
  • The network can be a private or even a centralised network permissioned by JPM.

With real time cross border B2B payments as the core use case, JPM Coin may create some challenges for Swift. Last year, Swift announced that its GPI technology that has had good feedback from its banking customers.
GPI technology that let banks see where their payments were at all times, and that came with rules around response and confirmation times.

However, the challenge for the newcomers (then) that kept Swift going was the mutual KYC requirement from the regulators, which was harder using a DLT payment mode. And GPI let banks see where their money was at all times. Assume a London based bank is sending money to a bank in Mumbai, there may be a couple of correspondent banks in between. The London bank can see where the money is, and stay on top of any delays, issues etc., They can also stay on top of the Service Level Agreements (SLAs) that the intermediaries offer.

With a crypto based approach, the transfer will be instantaneous without any need for correspondent banks as long as regulatory and relationship hurdles are overcome.

Ripple and XRP have had their challenges in gaining adoption from key banking players. One of the key reasons why cryptocurrencies couldn’t be used for cross border B2B payments is because of the market volatility of the cryptos. With a stablecoin like JPM Coin, that fundamental issue has been addressed.

Also, with the banking and corporate relationships that JPM commands, most of their counterparties would be better off being part of the network. The JPM’s interbank network has about 157 global banks, and adoption should be pretty quick once the piloting is successful. Although the underlying Quorum blockchain is based on Ethereum, it offers both private and public transactions capabilities. So banks and corporates on the network will have privacy if they choose/need it.

However, the real pain hits them (corporates) when a bunch of tier 1 banks launch their own stable coins. This space has just started to get interesting, and we should see an avalanche of similar offerings from global banks.

Arunkumar Krishnakumar is a Venture Capital investor at Green Shores Capital focusing on Inclusion and a podcast host.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email

US Health Care: The $2.8 trillion opportunity

US health


Reposted from April 2018, as it is Chinese New Year for Zarc Gin, our regular Insurtech Expert based in China.

A couple of weeks ago, there were rumors of Walmart purchasing U.S. Health Insurer Humana.

I’ve written about the U.S. healthcare market a few times and thought this news was rather interesting.

As I started researching this topic,  I decided to take a look at the U.S. healthcare market a bit more broadly.  

During my research on Walmart and Humana, I uncovered some interesting facts and figures which help to further shape my opinion on the opportunities I see in the future of the U.S. healthcare industry.  

While the initial sections are numbers focused (be prepared for a lot of numerical data!), I do touch on technology as well later on.  

As such, I have structured this week as follows:

  • Getting a bigger slice of the $3,300,000,000,000 pie
  • What do all these (potential) mergers mean?
  • How Technology can help
  • Amazon vs. Walmart – which ‘category killer’ will it be?

Getting a bigger slice of the $3,300,000,000,000 pie

There have been a number of large potential mergers in the U.S. Health Insurance & healthcare space, including:

Albertsons and Rite Aid also happened this year which, according to this article, included 2,569 pharmacies (the other 1,932 of which were transferred to Walgreens as part of another deal.)

As I read more and more about these various deals, both qualitatively and quantitatively, it became more clear what was going on.  

And then, I read in this article, the following quote from Walgreens Chief Medical Officer Dr. Patrick Carroll:

Why not use those locations as a strategy for healthcare?

Then it all made sense.  Allow me to share.

According to the Center for Medicare and Medicaid Services (CMS) National Health Expenditure Data (NHE), NHE grew 4.3% to $3.3 trillion in 2016, or $10,348 per person, and accounted for 17.9% of Gross Domestic Product (GDP).

Healthcare expenses are $3.3 trillion in the U.S. alone.  That’s $3,300,000,000,000, folks.

I was curious as to what that $3.3 trillion broke down into, so I started digging deeper.  

Included in the CMS link above are tables that have a number of ways to analyze this expenditure data (24 different ways to be exact).  

If you are interested, please look for this link on the page:

Screen Shot 2018-04-16 at 4.17.39 PM

Table 4 in the Zip file had some really interesting data:

2016 NHE

Zooming in on that data, I found some even more interesting numbers:

Screen Shot 2018-04-16 at 4.55.00 PM

Of the $3.3 trillion being spent on Health related expenses, $2.8 trillion was being spent on Personal Health Care ($2,800,000,000,000).

That’s a lot of money.  

And of that $2.8 trillion, $2.2 trillion is being funded through Health Insurance.  

That doesn’t tell the whole picture though.

What do all these (potential) mergers mean?

In addition to the research I found above, I found some more stats which painted a much broader idea about the conclusions that I was beginning to draw.

US Health Insurer market share

According to Health Payer Intelligence, in 2016, the top 5 health insurers payers in the U.S. are:

  1. United Health Group – with $184.8bn in revenue and 70 million subscribers
  2. Anthem – $89.1bn in revenue and 39.9 million subscribers
  3. Aetna – $63.1bn in revenue and 23.1 million subscribers
  4. Humana – $54.3bn in revenue and 14.3 million subscribers
  5. Cigna – $39.7 bn in revenue and 15 million subscribers

With a population of 326m people in the US, these 5 companies have coverage for 162 million people (or 49.7% of the population).

Pharmacy market share

In terms of prescription revenues, the pharmacies in the US are split as follows:


And in terms of number of pharmacies, the top 10 can be found here (according to SK&A Pharmacy Data):

Screen Shot 2018-04-16 at 6.50.01 PM

Pharmacy Benefit Manager market share

Pharmacy Benefit Managers (PBMs), according to Wikipedia, are third party administrators that ‘are primarily responsible for developing and maintaining the formulary, contracting with pharmacies, negotiating discounts and rebates with drug manufacturers, and processing and paying prescription drug claims’ and ‘As of 2016, PBMs manage pharmacy benefits for 266 million Americans.’ (that’s managing the prescriptions for 81% of the population…)

According to Statista, in 2016, the market share is as follows:

Screen Shot 2018-04-16 at 6.57.03 PM

Pulling it all together

Looking back at the potential mergers mentioned in the first section, we have a high possibility of:

  • Walmart (#4 in terms of number of pharmacy locations and #5 in terms of total prescription revenue), partnering with Humana (#4 Health Insurer in terms of revenue and # of subscribers, and which also happens to be the 4th largest PBM).  
  • Aetna (#3 Health Insurer in terms of revenue and # of subscribers) partnering with CVS (#1 in terms of number of pharmacy locations, prescription revenue and the largest PBM)
  • Cigna (#5 Health Insurer in terms of revenue and # of subscribers) partnering with Express Scripts (#3 in terms of prescription revenue and the largest PBM, tied with CVS).

Not to mention the fact that United Health Group (#1 Health Insurer in terms of revenue and subscribers) owns Optum Rx (third largest PBM).  They have upped their health care presence in the past few years by buying MedExpress Urgent Care, which has 203 locations.

One may think that Anthem (#2 Health Insurer in terms of revenue and # of subscribers) is missing out, but maybe they have some benefits to sitting on the sidelines and it’s no wonder there is some chatter relating to potential antitrust violations within these deals.

If I look at all of these facts and figures, it looks like these companies are aiming to build mini ecosystems for their customers, in an effort to start getting a bigger piece of the $3.3 trillion mentioned before…most specifically, the $2.8 trillion being spent on personal health care.

After all, if these companies can offer it all ‘in-house’; meaning prescriptions, simple doctor visits through their in-store clinics and a mechanism to have it paid for through Insurance benefits, then consumers may only need to go to hospitals for specialist visits and more serious ailments.  This should ultimately lower the cost of health care, while also shifting some of that $2.8 trillion to some different hands.

How Technology can help

Technology will play a key role in enabling this to happen.


In an article a few months ago, I wrote about what I thought CVS and Aetna could learn from Ping An, which I consider to be offering the ‘gold standard’ in terms of healthcare Ecosystems.

From that article, I analyzed the Online to Offline (O2O) capabilities within their Ecosystem:

Online through use of the Good Doctor app, a policyholder can:

  • Search for, and book doctors.  This can be either online consultations or in-person (i.e. offline)
  • Have an online consultation with a doctor
  • Purchase medicine
  • Get access to information about various health topics – either general or specific to me
  • Monitor their own health plan

Offline, Ping An has developed a network of hospitals, physicians, pharmacies and more, which will allow the policyholder access to services they can’t get through the online platform

All of these players are aligning the essential businesses in order to build these ecosystems. The Insurers already have relationships with the hospitals as well, which should help in bringing it all together.


Florian Graillot, Insurtech influencer and partner at recently wrote a great article in Coverager on Digital Health.  A few points he mentions:

  • Wearables – ‘Technology started to enter in our lives with several players developing wearables focused on fitness, sport and wellbeing.’
  • Data – ‘By trying to collect more customers’ data, they (insurers) hope to better understand their needs and increase the level of engagement they have with them by adding numerous touch points.’
  • Teleconsultation – ‘To increase number of touchpoints and offer additional services, teleconsultation is now a must-have for most of insurers and mutuals’
  • Data Privacy and sharing – ‘To better predict and prevent diseases, technology requires a huge amount of data to be relevant, and we see many startups monitoring behaviors on a real-time basis. This raises the first challenge for both insurers and startups: make people agree to share their personal data.’

Having more information on customers and being able to ‘track’ their health, will help to fuel the ecosystem.  This will enable all the participants in the value chain (doctors, pharmacies and Insurers) to know more about their customers on a real time basis, hopefully helping with more preventative measures and ultimately bring costs down.  As Florian states, ‘Insurers need to develop an ecosystem of technologies and startups around them to address their current challenges: increase number of touchpoints with customers ; understand behaviors to better prevent risks ; and reduce costs of healthcare.

I highly suggest reading the full article.  


Health Insurance probably has the most amount of data being transferred than other lines.  This is due to the numerous amounts of players involved in the process as well as the amount of information on a customer that can be available.

Further, Health Insurance data is the most personal of personal data.  

As such, something like blockchain, to help with the transfer and security of data seems like a solution that can help.

A Blockchain Health Alliance including Humana, Quest Diagnostics, Multiplan, and UnitedHealth Group’s Optum and UnitedHeathcare units has formed recently in an effort to ‘improve data quality and reduce administrative costs associated with changes to health care provider demographic data’.

Further, CB Insights has done a study on ‘5 Blockchain Startups Working To Transform Healthcare’.

Which ‘category killer’ will reign supreme (if at all)?

When it comes to ‘category killers’, two of the biggest and most famous are Walmart and Amazon.

We have been focused on Amazon coming into Insurance so much.  I wrote about this earlier this year, when Amazon, JP Morgan & Chase and Berkshire Hathaway teamed up to announce that they would be partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs.

I am still bullish on the prospects of this venture and I know Amazon knows a thing or two about building an ecosystem and how to use data.  However, the potential of Walmart buying Humana does have me very intrigued.

They have a massive head start to Amazon in terms of building their healthcare ecosystem.  After all, it was only 3.5 years ago that they announced the goal ‘To Be The Number One Healthcare Provider In The Industry’.  This includes:

Further, earlier this week, Walmart announced a redesign of its website and Amazon ‘put a pause on its plan to sell prescription drugs to hospitals’.


OK, are you still with me?  I know this has been a long article.

This topic interests me because it has been the single most mind-boggling item for me to deal with since moving back to the U.S.  I can’t believe how complex the system is here as well as how expensive it is.

It is really an area that needs a lot of help.

I know some of these mergers as well as Amazon’s foray into the larger picture of U.S. Health Insurance are still hypothetical.  However, they are important to monitor for the future of healthcare for people living in the U.S.

In addition to these events from the large Health Insurance incumbents and tech players, I also wouldn’t discount some of the work that Oscar are doing, as well as AXA, which has recently entered an agreement with Oscar and also acquired Maestro Health.

Now that I have looked at the breakdown of spending a bit more, I do believe the companies spearheading these large mergers are aiming to provide their customers with preventative measures, ‘offline’ one-stop shops (clinic plus pharmacies) and online facilities (teleconsulting and pharmacy refill/delivery).  

This will ultimately help them with getting a bigger piece of the $2.8 trillion.

Let’s hope all these efforts also help to reduce that actual dollar amount from a consumer spend perspective.

Image Source

Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.

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Nav on a mission to help SMEs navigate the valley of cash flow death

What does every human want when it comes to money, let alone every small business owner? Financial freedom, of course.

Freedom to have the ability to make decisions about your life, or your business, and not be beholden or limited by financial or information constraints.

Businesses like Nav, a SME focused financial management app that provides free access to credit reports, taps into this desire, handing back control on what is typically an opaque data point for a business, and which is often a limiting factor when it comes to accessing financing.

This week Nav secured $44.8 million in fresh funding from Goldman Sachs, Experian Ventures, Point72 Ventures, Aries, and CreditEase Fintech Investment Fund.

Since 2012, when the business was launched, the driving force of Nav has been a simple one – materially decrease the small business death rate. Mismanagement of cash flow is often the driver for this – studies point to over 80% of businesses citing poor cash flow management skills and a lack of understanding of cash flow as a failure reason. When the cash flow crunch hits – which it often does for many a small business – the only way out can be quick and timely financing. However quick and timely financing often comes down to how healthy that credit score is. It’s like ensuring your health insurance is up to date, just in case that ski accident leaves you in a plaster cast. Like insurance, your credit score is sort of like the one thing you have to have, that you hope you never need.

To date Nav claims it has helped over 400,000 businesses make better financial decisions and access capital. The company acts as a referral network for lending partners, and leverages affiliate and referral partners itself, to grow its base of SMEs.

Enabling financial freedom by making information available to the end user that changes the power dynamic, is a driving theme throughout all good fintech. If this was the only thesis you used as an investor, I’m of the firm belief you’ll be on the right side of returns, and history.

Nav is one example of this in action, and it’s clear these venture funds believe that thesis.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

Margin lending with no Counterparty risk– the Dharma open source protocol

In November 2017[1], I spoke to Nadav Hollander in California, the founder of, who had just “graduated” from Y-combinator. At the time, he described his vision to create on the blockchain a tokenized marketplace for loans. In February 2018, the Dharma open source protocol went into alpha testing.

Developers could easily use the Dharma libraries to:

  • Allow would-be borrowers and lender to generate open loan requests for debt agreements of any kind
  • Allow lenders to fill loan requests, formalizing a lending agreement with a borrower
  • Allow users to manage their lending portfolio by making repayments, collecting collateral, trading their debt tokens, etc.
  • Earn fees by underwriting debt agreements generated by Dharma protocol
  • Earn fees by relaying debt agreements between borrowers and lenders

Source Hello, Dharma.js

Dharma didn’t ICO because Hollander believed that token models were very immature right now. Hollander says “I’d rather build a community of constituent users and, only if and when it makes sense, issue a protocol token.” For now, Dharma open source protocol has no native token, but each loan that is created is a token itself

Fast forward to today, February 2019, one year later and Dharma raised $7 million from big investors including Coinbase Ventures who naturally are interested in crypto lending markets, especially for traders. Dharma has already launched the Dharma Lever product (in alpha mode) that deploys smart contract’s to offer margin loans for crypto traders from high volume investors.

No counterparty risk (smart contract risk, since assets are held there).

Instantly, at very low cost.

Lower borrowing rates than centralized exchanges.

Compatible with all wallets.

Screen Shot 2019-02-11 at 09.26.37

Dharma is in the same league as Maker – be your own bank or Defi[2] – that allow us to borrow against our Hodlings. Dharma involves no DAI and accommodates several cryptocurrencies beyond ETH. They are even looking to add WBTC soon which went live on Ethereum just last week.

WBTC – Wrapped Bitcoin is an ethereum-based token that is backed one-to-one by a regular bitcoin BTC.

It is already listed on several DEXs[3] including Radar Relay, Kyber Network, and AirSwap.

Dharma is changing the crypto lending space with their Lever offering that eliminates counterparty risk and replaces it with smart contract risk.


The Dharma Lever is one way to mitigate systemic crisis due to the domino effect of counterparty failures.

[1] I introduced Dharma in my Feb 2018 post Bonds & loans on the Blockchain along with Tzero and Nivaura.

[2] Defi = Decentralized Finance, see more here.

[3] Read more about DEXs in `Are Decentralized Exchanges part oft he bottom up decentralized monetary policy?`


Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

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