Highlighted below are five reason why crypto will obsolete present-day equities.

1. Reason number 1: Because conventional equity markets are completely broken

This should come as no surprise. U.S. public stock markets have not functioned effectively for a very long time?—?at least not since the annihilation of the small cap IPO in the aftermath of the dot com bubble burst.

Sure, equity markets can surge without small caps. But, they can’t sufficiently diminish wealth gaps and foster innovation without them. The fact is, stock markets are most constructive when they are providing a viable path of capital formation that serve companies and investors of all sizes.

Because they wait until so late in their life cycle to finally go public, today’s most sought-after emerging growth companies end up appreciating in the hands of venture capitalists instead of in the retirement portfolios of ordinary Americans. With companies IPO-ing with billions in market capitalization, some might even go so far as to say that America’s retirement savers have become nothing more than an exit strategy for the financial elite. Is it any wonder that retail investors have fled equity markets in droves?

There simply isn’t enough liquidity or demand to support a vibrant public market for most small cap stocks?—?notwithstanding the recent well-intentioned legislative pushes that help small emerging growth companies access capital from the investing public. Even the promising Reg A+ exemption has, thus far, been unable to revive the small cap IPO. And, it never will for the simple reason that Reg A+ fails to address the crux of the problem. The fact is, going public is not the issue. Being public is.

It is the ICO, not the IPO, that has been capturing the attention of speculators. Already, during the second quarter of 2018, ICOs raised a staggering 45% of the amount raised by traditional IPOs and 31% of the amount of venture capital raised.

Without a thriving small cap equity exchange, risk capital will continue its migration to crypto.

2. Reason number 2: Because retail investors hate equities

Some might argue that “hate” is too strong a word. In that case, let’s just agree that retail investors are “just not into equities” any longer.