Investing Idea: OmiseGo (OMG)

On May 6, Blockstack CEO Muneeb Ali tweeted:

Asia is indeed one of the major epicenters of the cryptocurrency ecosystem and was largely responsible for the 2017 bull market that drove assets like OmiseGo (OMG) to multiple record highs. If Asia is indeed your target market, then OMG should be on your shortlist of potential investments.

Founded in 2013, OmiseGo is a decentralized payment management system, exchange and settlement platform that provides financial inclusion and interoperability to unbanked populations and regions. Basically, OmiseGo provides a public network that allows businesses and individuals to interchange seamlessly with legacy payment systems (i.e., Visa and wire transfers) and decentralized blockchain platforms.

As KingPassive.com notes, you can think of OmiseGo as “the cryptocurrency version of Stripe or PayPal.”

Among the top-100 blockchain projects, OmiseGo is one of the most ambitious. It seeks to transform the banking industry by helping unbanked populations access the global financial system. This is a form of effective altruism that only technology can create. Below we will discuss the likelihood that OmiseGo can achieve its lofty vision.

OmiseGo Value Metrics

  • Current Price: $1.73
  • All-Time High: $28.35
  • All-Time Low: $0.3196
  • YTD Performance: +27%
  • Market Cap: $243 million
  • Market Cap Ranking: 31st
  • ROI Since Launch: 224%
  • Primary Markets: EtherFlyer, IDCM, Huobi, ZB.com

Investment Case

If technological innovation and large addressable markets are the keys to a successful blockchain project, then OmiseGo is well positioned to leave a lasting impression. Through dedicated teams in Japan, Indonesia, Thailand and Singapore, the company is looking to bring financial inclusion to the unbanked peoples of Southeast Asia. Astonishingly, nearly three-quarters of people in the region don’t have a bank account despite being the fourth largest internet market in the world. In other words, technology/internet adoption is high but access to traditional banking is very low. This is the gap that the OmiseGo network is looking to fill.

To be sure, OmiseGo isn’t looking to replace the traditional banking system but is offering a new way to provide financial inclusion. Businesses that work with the OmiseGo network can enable transactions using different payment systems.

OmiseGo also operates a white-label wallet service, decentralized exchange and a clearing house. The co-creator of the Lightning Network Joseph Poon is also developing OMG’s Plasma Network, which seeks to bring more scalability to the network.

“Ripple was originally seen to be the top solution in the payment providers sector, but its lack of decentralization has shown that there are significant downsides to their operating model. OmiseGO aims to become a decentralized Ripple, but operating a high-powered decentralized exchange (DEX), and has already become the top name in on-chain and cross-chain transactions.” – Hacked.com (August 15, 2018).

Omise is already a trailblazer in the Asia region and has attracted some big-name partners and investors. One of the company’s crowning achievements so far is a partnership with McDonald’s Thailand, which in 2017 agreed to use the OmiseGo payment channel at more than 240 retail locations.

Earlier this year, Omise was acquired by Charoen Pokphand Group, or CP Group, Thailand’s largest private company. The sale was reportedly worth $150 million. Two years earlier, Omise acquired Paysbuy, one of Thailand’s largest payment services. Clearly, OmiseGo isn’t going away anytime soon and is slowly becoming an important component of Thailand’s digital payment system.

Analyst’s Take

OMG was one of the top-performing cryptocurrencies through early April, but a sharp reversal turned it into a laggard compared with its peers. Year-to-date, it has returned 27%, including a 10% spike on Tuesday.

Beyond the recent price movements, OmiseGo offers a strong investment case for investors looking to capitalize on one of Asia’s rising stars. And unlike some of its peers, OMG is in very, very good hands. Just take a look at some of its advisers: Vitalik Buterin (co-founder of Ethereum), Vlad Zamfir (CasperLabs lead) and Roger Ver (founder of Bitcoin.com).

At $1.73, OMG is still trading 93% below its all-time high. In fact, prices are down more than 30% from their 90-day peak. Even a small investment in OMG, acquired through Ethereum or bitcoin, could lead to substantial returns during the next bull market. In this environment, OMG is likely to benefit from the broad market uptrend as well as company-specific news.

Case in point: just last month, OmiseGo announced that it was partnering with UNICEF for Surge Bangkok, a three-day event that promotes financial inclusion. Surge Bangkok will take place May 23-25.

Disclaimer: The author does not own OmiseGo. The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi