Abaxx Technologies: Overthrowing COMEX and ICE as the new global commodities exchange

TLDR: Abaxx has already exceeded volumes with exponential growth that beats liquidity on some Comex and ICE contracts and are well on their way to be a proper challenger for the Comex gold and silver contract. This would add billions in market cap to Abaxx at the expense of Comex and ICE. This keeps them on track for a 10x to 50x return. Also a short is irresponsibly exposed to all of this and has no way to cover without significant losses while insiders like Jeff Currie buy. This is another update (sorry its longish), you can see my previous DDs about it here: [Original DD at $40](https://www.reddit.com/r/wallstreetbets/comments/1omm40e/abaxx_technologies_newest_clearing_house_and/) and [Update DD at $44](https://www.reddit.com/r/wallstreetbets/comments/1r4n9hs/abaxx_technologies_real_time_collateral_of_real/), and now the stock is trading at $56.60 CAD. As predicted in my last DD just a couple months ago (quote below), revenue and trading volumes has surged. >The volume and revenue generated may still be still small but it's important to realize these things scale exponentially. As volume grows, it draws more volume in. [Daily Trading Exponential Growth at Abaxx](https://preview.redd.it/kbatxgugspug1.png?width=1950&format=png&auto=webp&s=e871ec76191c41c1f5bd3c25911e9b8f8667a8e9) In fact they just had in the past week multiple breakeven days with the record at $137k USD in revenue which annualized is $34.25 million USD. Applying a 20x multiple if they can keep these volumes up without further exponential growth they can easily be worth $600+ million USD as a safety net but I think we are looking at a company worth tens of billions. This is what the market was pricing at the time that many people missed when looking at the revenue and market cap alone without looking at the broader context in my last DDs. You can track volume and revenue with 5 min delay at [https://www.abaxxdata.com/](https://www.abaxxdata.com/) which just better presents the live exchange volumes from here [https://abaxx.exchange/market-data](https://abaxx.exchange/market-data) and is the source of these images. [Exponential Growth of Daily Revenue](https://preview.redd.it/rect5t3jspug1.png?width=1956&format=png&auto=webp&s=dc2ff71899c55caa246a84e75a48a425c3f93339) Volume obviously won’t just stop here. They will continue to surge as they onboard more customers. They just finished Trayport integration in the past week which has unlocked thousands more traders to the platform. Abaxx CEO has indicated we haven’t yet seen the volume yet from these traders since they only recently connected. Since the last investor call, Cannacord has increased their price rating from $60 to $62 CAD, BMO raised it from $64 to $69 CAD and Cantor still has theirs at $81 CAD (no updates yet since the investor call).  **New Gold Benchmark** Abaxx now has the second most liquid physically delivered futures gold contract following the Comex (ignoring SHFE because only China is allowed to trade it). They are surging in volumes but they still do not have any US based traders or UK as they onboard following FBOT approval. FBOT allows direct access to US markets. The effects of this likely won’t start until Q3 or Q4 when traders from those countries can finally start to trade after onboarding. I do think Abaxx will inevitably overtake Comex in terms of market share. Comex Gold futures contract likely generates around 500 million USD in revenue which if lost would be around $10 billion worth in market cap losses that Abaxx can scoop up. I say this because Comex/LBMA market structure is poorly thought out. If the current structure of buying futures in New York on Comex, then taking delivery and shipping to Switzerland for smelting to match LBMA standards, then shipping to London to sell on spot, which is then flown to Asia for delivery came out now, everyone would think it is ridiculous. Abaxx fixes this by having a spot and futures market that have the same size gold bar physically delivered to the same locations in Singapore. Asia does not like using the Comex/LBMA and they are a major source of physical demand. When they rotate to Abaxx (which we are seeing in real time), traders will follow and Comex will hemorrhage liquidity. Their gold open interest is already the lowest in the past decade. When that happens the efficiencies of Abaxx will make Comex gold look like the next blockbuster. This also means we will see LBMA haemorrhage liquidity as Abaxx has their own spot market for gold as well. After all as Zoltan Pozsar recently wrote on Abaxx gold: >Gold cloaked with Abaxx and gold naked ain't the same Abaxx will be doing the exact same thing but with silver which is expected to launch in the next 2 months. I would not be surprised if we see it surge in volumes out of the gate as onboarded gold traders will likely also trade silver. This also means we will possibly see days that put abaxx on a path to $100 million+ in revenue this year given the exponential growth of existing contracts and as they add on more contracts. [Gold Daily Trading Volume. Billions in Notional Gold Traded Daily](https://preview.redd.it/q2fsvvhvspug1.png?width=1980&format=png&auto=webp&s=aa999dcf70e5f1ee35697dde215797faa53df56e) **New LNG Benchmark** Abaxx has begun to dethrone JKM with Abaxx LNG trading volumes already exceeding ICE’s JKM trading volumes for several days in a row. Abaxx is the only one to provide a liquid physically delivered LNG contract that provides the needed physical delivered hedge. This is likely to cause a millions in lost revenue for ICE as their JKM contract starts to death spiral due to Abaxx. But this has much broader implications for Comex’s and ICEs oil contracts. Many of global LNG trade is indexed to oil because no liquid LNG futures existed. What this means  is that as Abaxx’s LNG contract grows in liquidity, you could see some oil liquidity (which previously was used for LNG hedging) flow to Abaxx causing revenue loss there as well. Overall you will likely see billions in market cap losses from Comex to ICE as trading moves to Abaxx. Abaxx CEO has also indicated they are working on launching their own oil contracts which when tied with their digital title technology will be competitive by allowing companies to better use the oil on oil tankers as collateral for trades when tracked via Minehub (They have a pilot program currently testing in transit collateral) [LNG Trading Volumes](https://preview.redd.it/5nyo542otpug1.png?width=1978&format=png&auto=webp&s=16c7346f7614eacb53e3456ce680c6f5e9da6d2d) [Abaxx CEO hinting at Oil Contracts](https://preview.redd.it/iiradsf80qug1.png?width=541&format=png&auto=webp&s=4c8557b31b32a5d7e0f21db5752b551c2cb0898b) **New Lithium Benchmark** Abaxx has also built a lithium benchmark contract. On April 8th for example, Abaxx traded 418 lots vs 36 on Comex. While it won’t generate as much revenue as the larger contracts like gold and LNG, it does show that Abaxx has the ability to take even niche benchmark status away from larger incumbents no matter how big they are. The smaller contracts though have other benefits to build, as traders wanting to trade this smaller contract creates more onboarding and connections to Abaxx’s exchange which serve as the launchpad for more niche physically delivered contracts. It would not be crazy to suggest Abaxx could generate $10-20 million per year for lithium as it reaches full liquidity which would be worth $200-400 million. When you combine it with the many other unique niche contracts that larger exchanges see as a waste of time (Maine Lobster for example?), you can generate hundreds of millions in revenue and create thousands of new clients worth of onboarding. [LIthium Trading Suddenly Trading Due to Onboarding after Months of No Activity](https://preview.redd.it/w7sys9yttpug1.png?width=1950&format=png&auto=webp&s=544cfc7092e84793467ad2f1118007603f504709) **Insider Buying** Over the past week two insiders have bought $400k on the market market with commodity expert Jeff Currie buying half of that. **Technology Update** Abaxx is in talks with their first traditional institutional company to become a paying client of their digital title technology that I talked about in my prior DDs following the success of the pilots. **Excessive Shorting** I really don’t like talking about shorts too much as the thesis should exist without them and there will always be shorts on a company. But you saw how the volumes surged suddenly? There was a fund that was pitching the short around to banks at the beginning of the year and shorted a million shares and they were likely caught off guard with the volumes rising as they did. The price increase wasn’t them covering but market reacting to volume surging. Shorts actually went up in possible hopes to contain the market. 1.3 million shares are now short on a stock that historically trades 50k a day. With 50% of that trading volume in the previous trading months being them shorting. It would take weeks for them to unwind that position with little liquidity to buy that much and every day Abaxx is breaking new exchange records. To say they are in a very difficult position is an understatement. Signing of the first technology customer with clear fee structure and TAM analysis would make investment analysts include it in their NPV calculations for their price targets for the first time. Launch of silver market would also surge volume and also need to be priced for the first time. Current price targets only really price Abaxx on conservative success of LNG, gold, and carbon contracts. It’s highly likely we see in the next 6 months price targets adjusted much higher and coinciding with Abaxx uplisting to possibly the Nasdaq and Singapore dual listing. This would drive price insensitive buying as they get added to many index funds.  Abaxx also has a years worth of runway (that grows as they continue to breakeven), with the last raise being non-brokered to a "highly strategic investor" who will likely be involved in Abaxx businesses. The usual escape hatch via raises does not exist with Abaxx. [Shorts Caught off Guard with Surging Volumes](https://preview.redd.it/l38266w8hqug1.png?width=1598&format=png&auto=webp&s=a78f24aed1882e4980e2cdd3fff9456561467612) [Last Raise Going to a Single Strategic Investor](https://preview.redd.it/fbmzklwuyqug1.png?width=546&format=png&auto=webp&s=e51dfebd3b2a4427f0708c5389a2042d68b1fb39) **Position** I remain long with 9690 shares. Options do not exist. https://preview.redd.it/pjy3ozvf5rug1.png?width=1014&format=png&auto=webp&s=9647f32bbedd160f4f58bb266d7fbd83fa772a77 https://preview.redd.it/gwvlsn8p5rug1.png?width=1166&format=png&auto=webp&s=2e5c6b594a04f824f1a6668b0fcf16b470b6c914