E Are ESG Stocks The Next Bitcoin?

The early days of bitcoin saw first movers position themselves to take advantage of an ideology that the mainstream didn't necessarily grasp at the time. Remember that the famous story about paying Bitcoin for 2 Papa John's Pizza's (PZZA) likely still haunts the person who did it. Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered pies. Fast forward a few years, and that pizza order is worth around $560,000,000. Who knew Bitcoin would've grown to the levels it has? Well, in short, many of the early adopters did, and they positioned themselves early. 

Now, I get frustrated with stories like this, but it's important to understand that not all "early opportunities" are worth it. Had things like DeFi and digital currencies got completely abolished, we wouldn't be talking about it, and the "early adopters" would be another group of pie-in-the-sky thinkers. But there is something to say about doing research and reading between the lines looking at the long-term. It's also important to follow the money. While gamers were the real "first movers" in Bitcoin, using it to purchase in-game assets, larger investors started coming into the cryptocurrency market shortly after. Among these are names like Cameron and Tyler Winklevoss, who've also established positions in numerous digital assets and cryptocurrency exchanges. You've also got former hedge fund managers like Michael Novogratz, who envisioned the potential of digital currency. In fact, in 2017, Novogratz estimated that roughly 20% of his net worth was made up of digital assets.

What Will Be The Next "Bitcoin"?

What's the point? The right amount of diligence and understanding of the true potential of a trend can lead to a strong investment thesis that can turn into a considerable windfall in the stock market. Right now, terms like socially responsible investing and ESG are being thrown around a lot more. But what does it all mean, and could it be the next big trend in the stock market? While the latter is something that we will see as the market evolves, the former is a bit more easily defined. ESG stocks are those with underlying companies that focus on a set of different socially responsible initiatives. ESG focuses on companies that seek to adopt environmental, social, and governance improvements that reflect positively on the corporate structure and the community around the companies. 

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