Our strategy is to hold a basket that consists of 70% core crypto for the portfolio with cryptos that have a track record and are well-established. The remaining 30% of the portfolio will be allocated to higher risk projects that are not as established, but the technical/roadmap items show a gap in the market and key advancement to what is currently available on the market.
Your background is in a financial industry. How, in your opinion, is crypto currently seen within the financial industry? Do you see that financial institutions are already preparing to be active within the crypto industry, or are they still in their own world?
The crypto industry is like marmite, either people love it or hate it, but that perception is generally changing. With the current economic climate and pandemic, central banks are printing money like it is going out of fashion. This will lead to many outcomes which could favor cryptos in the long run. The way the financial industry operates today is not viable in the future, and with the power of blockchain it will be considered the next revolution. When we first started out, getting a bank to accept a business that dealt in cryptos was very difficult. ow the barrier of entry has been lowered. The financial industry has seen what digitalisation can do and how efficient it can be, so eventually they will adopt it. But, I think it will still take some time, as the crypto industry needs to work together to combat the bad actors and enhance its reputation. The financial services companies can be seen as risk-averse in some areas due to the financial regulations depending on the region, and so jumping into the so-called “unregulated area” can have its own troubles. Eventually, governments and regulators will institute clear frameworks to help have some level of governance. We just hope they don't over regulate, thus stifling innovation.
Our team also utilizes members that have a wealth of experience in technologies, that can review projects, and provide analyses on potential success – which is vital to assess the fundamentals of the project. It takes time and patience to really understand this new paradigm, but the possibilities are endless and we still feel it is very early days for the industry. With the right springboard, the market cap of crypto index could see a significant increase.
What would you outline regarding your strategy? Do you follow any particular rules?
Research, Research, Research!!! We have a good rule of thumb – if it’s too good to be true, then generally it is. We are careful in our selection of what we pick, we spend hours reviewing projects, not only from a technical standpoint, but from a marketing perspective and how viable it is to get mass adoption. We take pride in our research space, where we review code changes, how many commits, etc. The recent DEFI explosion is a great example of boom and bust. There will be some survivors, but 99% will fail. We try to be fact-based in our management by reviewing teams, drawing roadmap, developing projects, deciding what that project solves in real life, and how realistic the final product is, while taking in the macro environment. Another thing to think about from a holistic perspective is the development of quantum computing. Recent news has shown that the advancement of quantum computing is gathering pace. Will this break some crypto projects? It’s still a long way off, but we try to consider all information as having an impact on the industry.
Is there any crypto project that has your interest?
There are loads of projects that we really like and want to see succeed in the whole crypto economy. Recently, UNISWAP, ICX, NEO, and many more are interesting in their own right, and have a certain USP that has gained traction. If I put my institutional investors hat on, then the cryptos that stand out are BTC & ETH. We see currently only a handful of cryptos that would attract institutional investment, which I envisage will be the more established coins with a solid track record. With the crypto insurance and custody industry gathering pace, this is all positive news for the crypto industry, as a whole. 10 years ago, who would have predicted that some big names in asset management would be offering Crypto assets to sophisticated investors?
Tell us more about Crypto UK. What is the purpose of that organization and how active are you with drafting the crypto legal framework?
Crypto Global Management was launched in the UK as a way for people to get to know more about this industry. We actively work to help the crypto community grow and innovate by working with regulators and taking part in consultations on various crypto related items. Our big concern is that we need a level of governance, but we don't want it so regulated that innovation dies. So there needs to be a happy medium. UK regulators are leaders in this area, so getting clarity on various crypto-related issues are welcome.
Check the strategy in action: https://www.iconomi.com/asset/CRYPTOGLOBALUK