AI Can Help a Long Tail of Micro Companies to Issue Tokens, Bitwise CEO

Tokenized stock will revolutionize the way small and medium-sized companies access capital markets, according to the CEO of Bitwise's crypto fund manager, Hunter Horsley.

And artificial intelligence [AI] could be the tool getting them there, he said in a Jan. 4 X post.

Noting that there are about 4,600 public companies in the U.S. and 200,000 businesses with $10 million or more in revenue, Horsley said, “not all companies want to be public, but many simply can’t because it requires immense scale.”

For these companies, tokenization is a “revolutionary” possibility, he said.

“Businesses with existing community, stakeholders and [communication] channels (ex. social, e-com) tend to have more success in converting them to shareholders,” he said.

AI is the answer

Beyond that, Horsley said an “explosion” of small companies could go public this way, even much smaller companies, “micro/niche” businesses with revenue from $100,000 to $1 million.

For them, AI is the answer. Using AI they could get the expertise needed to set up a tokenized offering without much knowledge needed.

“AI could massively increase the number of niche businesses [going public],” Horsley said. “These could never go public, but could tokenize. It could be a major new long-tail capital market.”

He added that AI could lead to an explosion of companies being formed, not just tokenizing existing businesses.

“A single person can use AI to make a much more niche version of a software service,” Horsley said. Imagine a dry cleaner or the maker of a “mobile-only CRM for independent electricians that need to conform to California laws.”

But who wants to be invested in a local dry cleaner, Horsley was asked.

“Some [combination] of the dry cleaner figures out a compelling dividend or special treatment for being an owner, or simply people's desire to help their communities,” he said.

As for the businesses themselves, the benefits are the ability to “pull forward the earnings, and allow customers to become shareholders and advocates.”