Investing Idea: Basic Attention Token

Basic Attention Token

Basic Attention Token (BAT/USD) is having a great year thus far. The cryptocurrency has more than doubled its value year-to-date. While technical indicators play a role in the crypto token’s ascent, the surging prices are being supported by strong fundamentals. Basic Attention Token is positioning itself to take over digital advertising. According to Statista, global digital advertising will be worth $335.48 billion in 2020.

In this industry, the cryptocurrency faces stiff competition from tech giants such as Google and Facebook. Nevertheless, Basic Attention Token offers a unique value proposition that can disrupt global digital advertising.

In its current state, digital advertising is dominated by middlemen (Google and Facebook). They abuse users and they hog most of the dollars spent by advertisers. Here are some key stats that illustrate how stakeholders are hurting:

  • As much as 50% of the average user’s data is consumed for ads and trackers which can cost up to $23 per month.
  • As a form of response, 198 million people are using ad blockers.
  • Ad blockers are installed on over 600 million mobile and desktop devices.
  • Google and Facebook take 73% of digital ad revenue, leaving content providers or publishers a small slice of the pie to survive on.
  • In the last 12 years, publishers had more than half of their revenue taken from them.

In other words, the digital advertising industry is inefficient. Something needs to change.

Enter Basic Attention Token. The cryptocurrency offers blockchain-based digital advertising that cuts out middlemen and gives all advertising amounts spent to publishers and users.

Basic Attention Token Value Metrics

  • Current Price: $0.336913
  • All-Time High: $0.980702
  • All-Time Low: $0.066209
  • YTD Performance: +161.54%
  • Market Cap: $427.3 million
  • Market Cap Ranking: 26th
  • ROI Since Launch: 100.27%
  • Primary Markets: ZB.com, IDCM, CoinBene, LAToken, Binance
BAT Market
BAT Market chart

Investment Case

Basic Attention Token’s growth is currently fueled by speculation. In the future, however, it will very likely be driven by widespread adoption. The crypto token offers an attractive business model that can lure both users and publishers. In this model, publishers receive a considerable portion of the digital advertising revenue. Users will also be rewarded if they choose to opt-in to view and engage with online ads.

BAT Model
Basic Attention Token’s unique value proposition | Source: Stateofthedapps

To build a healthy user base, Basic Attention Token founder Brendan Eich created Brave. The blockchain-based browser blocks all forms of ads and delivers a fast browsing experience that’s 3 times faster than its competitors. More importantly, the browser features “Brave Ads” that enable users to opt-in to receive advertisements. If they do, they will be rewarded with BAT which can be worth as much as 70% of the gross ad spent.

With these features, Brave users have surged from 1 million at the start of 2018 to 5.5 million by the end of the year. That’s a growth rate of 450% in one year.

As users flock to the browser, publishers are following suit. There are over 28,000 verified content providers on Brave. Publishers include YouTube channels and Twitch streamers. That is an increase of over 600% from the number of publishers (~4,000) at the start of 2018.

Publisher Growth
Brave publisher growth | Source: Batgrowth

While 28,000 is not a shocking number, the graph above shows that publisher growth is in a strong uptrend. The strongest trend comes from YouTube channels while Twitch streamers are just getting started. The uptrend is very likely to continue because publishers are not required to use Brave to get BAT rewards. They can simply get verified via Uphold and deliver content as usual.

Analyst’s Take

Basic Attention Token’s reward system will likely continue to attract more users. As more people use a blockchain-based browser that blocks ads and offers money for viewing ads, publishers will want in on the action. Where users and publishers go, advertisers will follow. The cryptocurrency has one more trick up its sleeve to attract advertisers.

Brave will measure attention by tracking, in real time, the ads and content that users see. The value of a user’s attention will be calculated according to duration and pixels viewed. By monitoring these details, machine learning algorithms will match ads based on interest to minimize irrelevant ads.

The Bottom Line

If you’re a long-term investor, these are encouraging developments that indicate a fundamentally sound asset. You want to enter the market before everyone else does. Position early while the crypto token is still building its user base and publisher base. By the time advertisers enter the scene, it will be too late. They will gobble up BAT supply and that will exponentially increase the price of the crypto token.

This is our investment case for Basic Attention Token.

Disclaimer: The author does not own Basic Attention Token.
Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.