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The global pandemic has forced businesses to digitize their sales or perish. Former market trends are not coming back. COVID may be contained within 18 months, but the digital trends and investments being made now are the future of business. The past is gone.

Asset platforms are out, digital platforms are in. Typical asset based platform companies without online transaction platforms have had their sales drop 10% to 20% YOY. Examples are abundant in transit, oil and gas, retail, electricity, medical, education, manufacturing, chemicals, equipment and more. Despite these dire statistics, some companies are thriving who have digital platforms in their industries.

Asset based platform markets are a $43 trillion global industry and a staple of our market economy. But deflation, fluctuating prices for assets and legacy technology can wreak havoc on the budgets of companies, not to mention the investors who depend upon them for their retirement or income. From infrastructure asset networks such as shopping malls or centralized power generation to commercial real estate and airlines that depend on physical asset transactions for their livelihood to recording artists who depend on large arenas to promote their latest albums, the number and range of people who are effected by the mega trend towards platform virtualization and whose sales and profits are impacted by the price of assets are enormous.

Given the size of the asset platforms and its impact on our economy, it is astonishing how little was done in the past to manage this deflationary price risk or movement towards platform technologies and virtualization. Some large companies have invested in legacy database systems, but this was and remains an inflexible solution, carrying substantial risk for asset platform companies and does not correlate to their revenue exposures in a world moving towards virtual platforms. Typical infrastructure asset based business has been built on the principle of inflation and centralized asset scale. Few solutions were available to shield companies from deflation or decentralization, or, for that matter, the move to virtualization. Yet these deflating asset prices had a direct impact on the corporate profits, both for asset buyers and sellers.

Today, all this has changed, CirclesX has created a new breed of technological, financial and physical risk management tools and structures that can be used to immunize companies against a wide range of deflationary asset platform risks and help them achieve a broad cross-section of financial goals.

Already, companies in industries as diverse as technology, finance, energy, manufacturing, retailing transportation, logistics, data and broadcasting are using these platform risk management tools to:

• Mitigate deflation across their physical assets

• Transition towards platform virtualization trends

• Smooth revenues (compensate for loss of demand)

• Cover excess costs

• Hedge fluctuations in asset budgets

• Reimburse “lost opportunity” costs

• Bolster marketing plans (drive sales)

• Diversify investment portfolios

By using geolocation exchange platform technologies and price risk management tools to complement existing risk management strategies, companies can better manage their sales and earnings. This, in turn, can help them reduce their cost of capital, and, ultimately, attract a wider range of investors.

Finally, the burden of dealing with unpredictable asset prices and deflation has become an opportunity.

3 Responses

    1. The criterion for market creation span most markets. Market creation is subject to: A homogenous product (it can be substituted); the quantity can be standardized; the prices move up and down; many buyers and sellers. These criteria are met by 70% of GDP goods and services.

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