Why Investors Are Psyched About Psychedelic Stocks
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Why Investors Are Psyched About Psychedelic Stocks

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Why Investors are Psyched about Psychedelics

The Briefing

  • Plenty of psychedelic stocks have experienced triple-digit returns in the last year
  • Optimism is brewing as governments grant research approvals for the study of psychedelics on mental health
  • By some estimates, the psychedelic drugs market is projected to see compound annual growth (CAGR) of 16.3% to reach $6.85 billion by 2027

Psyched About Psychedelics

Psychedelic stocks are trading like biotechnology companies these days. The prospect of promising research has pushed valuations upwards. And like biotech companies, they often report no revenues and are a volatile bunch.

Awareness around mental health disorders is increasing, as are the number of people who suffer from them—a figure exacerbated by the pandemic. Although these factors are grim, they are actually catalysts for psychedelic stocks.

The Societal Cost

Today, greater emphasis is put towards combating mental health. In part because its societal cost is increasingly difficult to ignore. And the solutions to them may take on various forms. For instance, alternative medication.

There are over 100 million people who are resistant to traditional treatments for depression. Some studies reveal up to ⅓ of patients experience treatment-resistant depression.

As a result, this is where the application of psychedelics in microdoses is perceived to add value—and where a market may arise.

Regulatory Status

1. Health Canada
Health Canada granted 16 exemptions to a selection of nurses, doctors, therapists and social workers. Thus, allowing them to possess and use psilocybin for personal training without fear of prosecution under the country’s drug laws.

2. The FDA
The FDA declared psychedelics a breakthrough therapy for severe depression.

3. The State of Oregon
Oregon approves a legal framework for the therapeutic use of psilocybin. Becoming the first state to do so.

Mushrooming Valuations

Investors love a good story. And legalizing psychedelic drugs to combat the growing societal challenge that is mental health is as good as it gets.

Psychedelic Stock2020 Stock Price Performance
Mind Medicine864%
Numinus Wellness555%
Red Light Holland300%
Codebase Ventures210%
Revive Therapeutics166%
Hollister Biosciences148%
Lobe Sciences133%
Compass Pathways88%
Better Plant Sciences76%

Some of the earlier research and studies on psychedelics are expected to be released by mid-2021, and investors are already getting ahead of this in optimistic anticipation. This is evident in the valuations of some of these companies, which in some cases are already reaching a billion dollars.

Welcome to the shroom boom.

Where does this data come from?

Source:YCharts & Frontiers In Psychology
Notes: This data was released on September 4, 2020

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Top 20 Countries With the Most Ultra-Wealthy Individuals

Developing countries are creating wealth like never before, but the majority of the world’s ultra-wealthy people still live in the United States.

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The Briefing

  • According to Credit Suisse, there are now 218,200 people globally with assets over $50 million.
  • The majority (53%) of the world’s ultra-wealthy people live in the U.S.

Top 20 Countries With the Most Ultra-Wealthy Individuals

New data from the Credit Suisse Global Wealth Report shows that there was an “explosion of wealth” last year.

The global population of ultra-high net worth individuals (UHNWIs) grew by 46,000 to a record of 218,200. The report notes that UHNWIs benefited from a surge in the value of financial assets last year.

These increases are more than double the increases recorded in any other year this century. – Global Wealth Report 2022

The majority of ultra-wealthy individuals already reside in the United States, but 2021 saw a staggering increase of 30,470 people bring added to this exclusive ultra-wealthy category in the country.

Country/regionNet Worth of $50–$100MNet Worth of $100M–$500MNet Worth of $500M+
🇺🇸 United States103,66935,7401,726
🇨🇳 China20,01311,4111,282
🇩🇪 Germany6,0523,354318
🇨🇦 Canada3,4721,912123
🇮🇳 India3,0241,750210
🇯🇵 Japan3,3731,41188
🇫🇷 France3,2371,31485
🇦🇺 Australia2,9471,576109
🇬🇧 United Kingdom2,7871,278110
🇮🇹 Italy2,5741,253103
🇰🇷 South Korea2,4501,319117
🇷🇺 Russia2,1341,488253
🇨🇭 Switzerland2,11598792
🇭🇰 Hong Kong SAR1,7901,139127
🇸🇪 Sweden1,8661,01976
🇹🇼 Taiwan1,87491293
🇪🇸 Spain1,50966651
🇧🇷 Brazil1,23874995
🇸🇬 Singapore97457073
🇳🇱 Netherlands1,10047128

China and India will likely see their ultra-wealthy populations increase dramatically, but still have a long way to go before catching up to the United States.

The biggest increases, aside from the U.S., were China (5,200), Germany (1,750), Canada (1,610), and Australia (1,350).

Decreases in UHNWI populations were more rare, but did occur in a few cases. United Kingdom (-1,130), Turkey (-330), and Hong Kong SAR (-130) saw the biggest drops.

Where does this data come from?

Source: Credit Suisse Global Wealth Databook 2022

Data note: All amounts in USD

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Ranked: The Top Cyberattacks Against Businesses

Recent research provides insight into the top cyberattacks that businesses faced in 2021. See the results in this infographic.

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Ranked: The Top Cyberattacks Against Businesses

Cyberattacks hit a record high in 2021, continuing the momentum that had developed during the COVID-19 pandemic. One reason for this increase is the shift to remote work, which has opened up new vulnerabilities. Home networks are typically less secure, and the rapid rise in the use of online services means security is falling behind.

In this graphic sponsored by Global X ETFs, we’ve visualized survey results showing the 10 most successful types of cyberattacks in 2021.

The Results

These results are from a 2021 whitepaper by Osterman Research, a market research firm focused on cybersecurity. They surveyed 130 cybersecurity professionals from mid and large-sized organizations to see which types of attacks were the most prominent.

Type of AttackPercentage of respondents (%)
Business email attack was successful in tricking a lower-level employee53%
Phishing message resulted in a malware infection49%
Phishing message resulted in an account being compromised47%
Domain name was spoofed to perpetrate phishing campaigns38%
Ransomware was detected before it could be activated34%
Business email attack was successful in tricking a senior executive28%
Domain name impersonation resulted in a third-party being compromised16%
Phishing message resulted in a ransomware infection14%
A ransomware attack was successfully launched10%
A ransomware attack rendered internal IT systems non-operational10%

Source: Osterman Research (2021)

The report notes that these figures may be understated because organizations are likely to downplay their security incidents. Organizations may also lack the capability to detect all types of cyberattacks.

The Impact of Phishing Attacks

Phishing refers to an attack where the perpetrator pretends to be a trusted entity. These attacks can be carried out over email, text message (SMS), and even social media apps. The goal is often to trick the victim into opening a malicious link.

According to the whitepaper, opening malicious links can result in credential theft or ransomware infections. Credential theft is when attackers gain access to internal systems. This is incredibly dangerous, as it allows attackers to commit fraud, impersonate company officials, and steal data.

A powerful tool for preventing credential theft is multi-factor authentication (MFA). This method requires users to provide multiple verification factors to access a resource (instead of a single password).

The Threat of Ransomware

Ransomware is a type of cyberattack that involves blackmail, often for financial gain. For ransomware to be successfully planted, attackers must first gain access to a company’s networks.

Access can be gained through phishing, as discussed above, or alternate means such as compromised software updates. One such attack impacted over 57,000 Asus laptop owners in Russia after hackers created a malicious update tool on an official Asus server.

Cybercriminals have become increasingly ruthless in how ransomware attacks are executed.
– Osterman Research

Researchers have warned that ransomware attacks are becoming more dangerous and sophisticated. In addition to locking organizations out from core systems, hackers are also stealing data to increase their leverage. If a ransom is not paid, the stolen data may be published or even sold to the highest bidder.

Under Siege

The rising frequency and sophistication of cybercriminal activity is a major threat to the world.

According to the World Economic Forum’s 2022 Global Risks Report, ransomware attacks have increased by 435% since 2020. Furthermore, there is an estimated shortage of 3 million cybersecurity professionals worldwide.

To catch up, businesses and governments are expected to increase their spending on cybersecurity over the next several years.

The Global X Cybersecurity ETF is a passively managed solution that can be used to gain exposure to the rising adoption of cybersecurity technologies. Click the link to learn more.

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