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Blockchain Takeaways From Interviewing Bart Stephens

2018-08-09T11:39:11-07:00

Don Friedman’s Takeaways

A Recap from interviewing Blockchain Capital’s Co-Founder & Managing Partner: Bart Stephens

It was a pleasure having the opportunity to interview one of our Digital Asset Strategies keynote speakers Bart Stephens from Blockchain Capital. Bart’s firm is the most established VC firm in the blockchain sector and the first VC firm to raise a venture fund through an ICO. He’s a true testament to quality and credibility of our speaking faculty. Our “allocator only” attendees will surely benefit from hearing his thoughts when he shares the stage with Fundstrat’s Thomas Lee on the session: State of the Digital Asset Market: A Legitimate Asset Class or Another Tulip Mania?

Key takeaways from my interview include:

  • Blockchain Capital’s most important criteria when investing in firms is making sure they have a world class team of entrepreneurs who have the right engineering and technology background to build a multi-billion dollar company.
  • The demographics of people who own crypto assets and the demographics of people who play video games are almost identical so there’s a very good crossover leading to an explosion of new entrepreneurial activity around the Intersection of blockchain technology and the video game industry.
  • The basic building blocks are now in place for institutional asset managers to both trade and custody crypto assets.

Read the entire Interview With Bart Stephens HERE.

Blockchain Takeaways From Interviewing Bart Stephens2018-08-09T11:39:11-07:00

The Right (and Wrong) Way to Invest in Blockchains

2018-08-09T11:58:42-07:00

The Right (And Wrong) Way To Invest In Blockchains

Bitcoin investors have ridden a volatility roller coaster for the past two years. Here’s a much better long-term strategy for investing in blockchains and cryptocurrencies.

Bitcoin investors have ridden a volatility roller coaster for the past two years. We’ve almost become numb to get-rich-quick blockchain schemes, as scores have surfaced during the past two years. It seems like everyone and their dog has devised an idea on how to make money off of blockchains. If “euphoria” described the public’s attitude toward blockchains in 2017, then “trepidation” seems to be the word for 2018. This volatility roller coaster has investors hesitant, but still eagerly waiting to see what happens next. So is there any hope for bitcoin’s future?

>> Read More

The Right (and Wrong) Way to Invest in Blockchains2018-08-09T11:58:42-07:00

Taking the Mystery Out of Blockchain Investing

2018-08-09T11:58:16-07:00

Taking The Mystery Out Of | Blockchain Investing

A blockchain-focused portfolio is a global, diversified growth play.

Why would one want a separate portfolio allocation to blockchain technology? It’s a question nagging many professional investors as they see headline after headline on the topic. The thesis is somewhat similar to sector investing: It can help advisors express thematic market views and/or capture potential alpha opportunities. Traditional sector opportunities may be growth-oriented, like technology funds, or income- and volatility-focused like utility funds, or potential inflation hedges like real estate and other real asset funds. In all, sector plays are a significant part of the investment universe, to the tune of over $750 billion in sector mutual funds and ETFs.

In the same way, an actively managed blockchain sleeve can add specific exposures to an equity portfolio, in particular

>> Read More

Taking the Mystery Out of Blockchain Investing2018-08-09T11:58:16-07:00

Investing in Blockchain Companies – The Top Five Myths

2018-08-09T11:58:30-07:00

Investing in | Blockchain Companies

The Top Five Myths Investors Should Look Out For

Blockchain, also known as distributed ledgers, virtually allows anyone with access to online devices to handle transactions or digital interactions that are designed to be secure, transparent, fast and efficient. In 2009, the Bitcoin cryptocurrency introduced a peer-to-peer (P2P) electronic cash system. Enabled by underlying powerful blockchain technology, Bitcoin was designed as a decentralised and digital currency that is not owned or controlled by any central banks. Despite being a technology buzzword for nine years now, has blockchain progressed enough to be among the potentially disruptive technologies, like AI or DeepTech, in today’s global economy?

>> Read More

Investing in Blockchain Companies – The Top Five Myths2018-08-09T11:58:30-07:00

Bart Stephens Interview: ICOs, Custody and more

2018-08-09T11:59:27-07:00

Bart Stephens | Blockchain Capital

The forthcoming explosion of security tokens

Bart Stephens is the Co-Founder & Managing Partner at Blockchain Capital, the most established VC firm in the Blockchain sector, the first VC firm to raise a venture fund through an ICO and the most active VC investor in the sector, with 75 portfolio companies across four funds. We recently spoke with Bart, who will be speaking at our Digital Asset Strategies Summit (Oct. 16 – 17 – Dallas), as he shared with us his thoughts regarding the strong intellectual interest in blockchain and crypto assets by financial institutions.

Bart StephensDigital Asset Strategies Summit: Your VC firm issued the first digital tradeable blockchain-based financial product to investors as well as the first SEC compliant ICO. Is this the future of venture capital and private equity investing?

Bart Stephens: One of the unexpected innovations blockchain technology has enabled has been an explosion in global crowd-sourcing for tech projects. This has primarily been done on the Ethereum blockchain in a transaction called an ICO. These ICOs have primarily funded blockchain technology projects by issuing utility tokens and other crypto assets. However, we foresee that there will be an explosion of a new category of tokens that represent more traditional securities called security tokens. Blockchain Capital invented the world’s first security token called the BCAP which is essentially a blockchain-based and tradeable venture fund with each token representing a limited partnership interest in the fund. These tokens are liquid and trade on the secondary market similar to the way a closed end fund trades on the New York Stock Exchange. Our BCAP ICO was also done in a regulatory compliant manner via a Reg D 506(c) and Reg S offering that complied with AML/KYC rules in addition to investor suitability. Though the BCAP was the first security offering and first compliant ICO, we expect many more to follow in the coming years.

Digital Asset Strategies Summit: Do you see all future ICOs being issued in compliance with the SEC?

Bart Stephens: The SEC has been surprisingly thoughtful and balanced in its approach to both blockchain technology and crypto assets. For example, the SEC has explicitly stated that neither Bitcoin or Ethereum are considered securities due to the decentralization of their current network. The SEC has also given the industry preliminary guidance on whether an ICO will be considered a security based on a settled supreme court case law known as the Howie Test. The SEC is looking at these token offerings on a case-by-case basis. The challenge the SEC faces is to support innovation here in the US but also protect investors and financial incumbents.

Digital Asset Strategies Summit: Your colleague at Blockchain Capital recently stated that “Every major bank is trying to do something in the space.” What specifically have institutions been doing to penetrate the cryptocurrency space?

Bart Stephens: Banks and financial incumbents are caught in a classic “innovators dilemma” with respect to blockchain technology and crypto assets. Financial institutions, generally speaking, are highly regulated and risk-averse. The emerging blockchain technology industry is fast-moving, controversial and often clouded in regulatory uncertainty. It makes for a challenging operating environment for financial institutions to address this global phenomenon. It’s part of why it’s so exciting to finance start-ups in this ecosystem. There are massive opportunities for small and nimble companies to address large global markets that financial incumbents are ill-equipped to address. With all that being said, the growth of these markets is now too fast to ignore if you are a Fidelity, Goldman Sachs, or even Jamie Dimon’s JP Morgan. There’s also a generational issue at play here, where millennials are inherently more comfortable with mobile and digital platforms and crypto assets. So, if you’re a large financial institution looking to meet the needs of your millennial customers who are asking for these products and services, your choice is to enter the market or lose those customers to your competitors. Expect more financial incumbents to launch services such as trading, custody and lending of crypto assets this year and next year.

Digital Asset Strategies Summit: Have you witnessed an increase in the number of crypto companies looking to raise venture capital specifically to build platforms and tools for institutional clientele?

Bart Stephens: In the last several years, I have spoken with dozens of hedge funds, family offices and traditional institutional investors. I can tell you first hand that there is a strong intellectual interest in blockchain and crypto assets. However, a lot of the infrastructure and “form factors” that institutional investors are used to with more traditional assets is still being built – namely custody and prime brokerage services. The lack of these services has kept institutional capital from entering the crypto asset market – but this is rapidly changing. Companies such as Coinbase, Bitgo, itBit, Circle and others are all entering the institutional market which we believe will increase adoption and fund flows into the crypto asset market in 2019.

Digital Asset Strategies Summit: A recent rumor had been circulating that Facebook is interested in acquiring Coinbase, one of your portfolio companies. What kind of an impact would a Facebook/Coinbase marriage have on the crypto industry and financial services industry at large?

Bart Stephens: I can’t comment specifically on Coinbase acquisition rumors – as an investor in the company, it would be inappropriate. I can say that two years ago, I could have foreseen a company like Charles Schwab or E-Trade acquiring Coinbase. Now I think it is more likely that Coinbase could acquire either Charles Schwab or E-Trade, or more likely add stock brokerage services to compete with those financial incumbents head-to-head. As a fun fact, Charles Schwab is a world-class company based in San Francisco that is 47 years old. Coinbase added more accounts in the last two years than Charles Schwab has in its 47-year history. The growth rate we are seeing in the operating companies in the crypto ecosystem are faster than Internet 1.0, social media companies and sharing economy companies.

Digital Asset Strategies Summit: Thanks Bart. We look forward to hearing more of your thoughts at the Digital Asset Strategies Summit October 16 – 17 in Dallas.

Bart Stephens Interview: ICOs, Custody and more2018-08-09T11:59:27-07:00

Lex Sokolin – Hopefully 2019 will be about creating interesting and easy-to-use applications for real people

2018-09-19T20:25:22-07:00

Lex Sokolin | Autonomous Research

Cryptocurrency and blockchain predictions

Lex Sokolin is a Partner and Global Director of Fintech Strategy at Autonomous Research. Lex is a futurist and entrepreneur focused on the next generation of financial services. He was named one of Linkedin’s “Top FIntech Voices of 2017”. We recently sat down with Lex, who will be chairing our Digital Asset Strategies Summit (Oct. 16 – 17 – Dallas), as he shared his thoughts on new developments he thinks may happen in the world of crypto and blockchain.

Lex SokolinDigital Asset Strategies Summit: At what point does digital lending and crypto converge?

Lex Sokolin: In my view, Crypto and Fintech are closely related, but different themes. The latter is about using technology to democratize access to existing financial product. Think about using desktop or mobile-first interfaces as front-office or middle-office solutions. So companies like Roboadvisors, Neobanks, or Digital Lenders are all great at democratizing solutions, creating access to products at a much lower cost, with a lower distribution overhead, thereby allowing many more people to access high-quality financial products from institutions.

Crypto, on the other hand, is about decentralizing the manufacturing of financial product. You can certainly layer other Fintech solutions on top of that – so as to have a Roboadvisor or Digital Lender that uses blockchain underneath it. But the core innovation of decentralized global computing or digital assets is something completely new.

I believe it will take quite some time, likely 3 to 5 years, for regular people to get fully comfortable with financial products that have been manufactured in a decentralized fashion. We saw a comparable gap in the case of BitTorrent and the modern streaming services. Media sharing led the invention of technology that in large part now also powers how music and media are downloaded at scale by everyone.

Digital Asset Strategies Summit: How does crypto make financial services companies more customer centric?

Lex Sokolin: To understand crypto, you have to understand the communities that drive different projects. The builders and the users literally hang out together and build together. This behavior was seen before in open source communities, but did not need to apply to financial services companies with traditional value chains. Looking at Crypto today, financial services companies can learn a lot about customer growth, user-led marketing, rewards that people care about, and social platforms which determine which projects succeed or fail. Such decentralized networks exhibit growth that certainly rivals that of any finance company in history.

Digital Asset Strategies Summit: Will regulations ultimately obsolete ICOs or will they enhance them?

Lex Sokolin: At the surface level, there are two things to say about regulations. First, shining a light on good and bad practices, and creating implications for poor types of behavior is an absolute positive. While global regulations differ, coherent frameworks are starting to emerge from the patchwork. These will help quality projects move forward and they will also help drive adoption by normalizing the asset class. Driving out the bad actors by starving them of oxygen — the easy scams and hacks available now — is also a good thing. The second point is that regulations are very likely to reflect our existing worlds as opposed to future ones. That can be a danger to innovation and experimentation, which different societies prefer at different amounts. Hopefully, that can be decided through cultural and social negotiation and not by decree.

The broader point about regulation is that, at least to a meaningful extent, crypto governance has to happen in the software itself. Code will execute as it is written. Therefore, until lawyers, regulators and common practitioners have a strong grasp of computer science, human judgement-based approaches to litigating issues within these networks may come off as foolish.

Digital Asset Strategies Summit: If 2018 can be summed up as the year of developing the crypto infrastructure, what do you predict will define 2019?

Lex Sokolin: If the infrastructure does get built in a significant way during the rest of this year, then I hope 2019 will be about creating interesting and easy-to-use applications for real people. A few hardware projects are also in-flight, which may land mobile phones that are block chain-native into the hands of consumers. Interesting mass-appeal crypto projects could come from unexpected places. For example, it could be the next augmented reality Pokémon GO game that brings digital collectables into teenager hearts. Or maybe a local community in a developing country will start using an application that allows for credit to be used between the un-banked. Or, perhaps certain medical data can be jointly shared by hospitals and governments around the globe to help treat critically-ill patients, saving lives using the technology. While it is hard to predict an accurate outcome, I’m excited about the direction of travel within the application layer.

Digital Asset Strategies Summit: You have stated that there is no distinction between the web enabled world and the crypto enabled world. Can you explain?

Lex Sokolin: To answer this, you almost have to get to philosophical grounds. Should people believe in Progress? Is such a concept naive and idealistic, neglecting the lived experience of millions of people in the world today? Is it revisionist history, justifying everything that’s happened before with broad strokes? I think, if we put aside socially constructed issues like culture and politics, we can find some version of Progress in technology. This is also a very Millennial perspective. Technology has been getting better and better every year in my lifetime. And certainly some have drawn that arrow of history to the first time people made fire.

So I believe that crypto is the next step of a technological toolkit. That means anything that is currently on the web will in the future incorporate blockchain-based elements (in the same way that technology today incorporates electricity, or radio waves, etc.). If you are an entrepreneur today, there is no reason not to use at least a small portion of what the crypto world has to offer within your business idea and see what happens. It’s an exciting time!

Digital Asset Strategies Summit: Thanks Lex. We look forward to hearing more of your thoughts at the Digital Asset Strategies Summit October 16 – 17 in Dallas.

Lex Sokolin – Hopefully 2019 will be about creating interesting and easy-to-use applications for real people2018-09-19T20:25:22-07:00

Tyrone Ross – If you don’t own the private keys, you don’t own the coins

2018-09-19T20:23:09-07:00

Tyrone Ross Jr. | NobleBridge Wealth

Safety and security issues of investing in cryptocurrencies

Tyrone Ross is a Managing Partner at NobleBridge Wealth Partners, a financial advisory firm. Tyrone has more than a decade of experience, working at firms including Morgan Stanley and Merrill Lynch, in the financial services industry. We recently sat down with Tyrone, who will be speaking at our Digital Asset Strategies Summit (Oct. 16 – 17 – Dallas), as he shared with us his thoughts regarding the safety/security issues of investing in cryptocurrencies.

Tyrone RossDigital Asset Strategies Summit: Can you discuss the importance of holding your coins in a personal digital wallet as opposed to on an exchange?

Tyrone Ross: If you leave your coins on an exchange you are extremely vulnerable to getting hacked and having your coins stolen. There is a term in crypto that says, “if you don’t own the private keys, you don’t own the coins.” A personal wallet gives you complete control over your coins privacy, security and utility. This is also core to the mission of crypto which is for everyone to function as their own bank.

Digital Asset Strategies Summit: Can you explain the difference between cold storage and hot storage?

Tyrone Ross: To keep it simple the difference between cold and hot storage is simply whether coins are stored online or offline. Cold storage is the most secure as they are offline and hot storage means they are still online and connected to the internet. This is why everyone who holds cryptocurrency is encouraged to store their coins in a hardware wallet which is the most secure form of cold storage. With that said for those not savvy enough to know the ins and outs of the technology, Coinbase holds 99% of their customers in cold storage.

Digital Asset Strategies Summit: Can you discuss how Coinbase becoming a licensed broker and Circle obtaining a federal banking license will impact the market for digital assets?

Tyrone Ross: As someone who recommends both Coinbase and Circle to clients I was very happy to see this news from both companies. There are a few things that are keeping crypto from gaining mass adoption including regulation and custody. As these companies continue to develop and become more like traditional brokers and banks it will lead the way for large institutions to enter the space. It also will allow them to go beyond just brokering the sale of coins, but to provide holistic financial solutions to clients. Personally, I am very impressed with Circle and their full suite of services including the Circle Pay app.

Digital Asset Strategies Summit: Fidelity has recently posted job openings hinting at their intention to get into digital currency offerings. How would Fidelity’s entrance into the space impact the landscape?

Tyrone Ross: As of right now clients are able to see their Coinbase account through the Fidelity portal and have the ability to buy and sell as well. As one of the larger legacy institutions with an established brand it will go a long way towards giving crypto credibility. If consumers and other institutions see that Fidelity is entering the space they will follow suit and begin to build out their platforms as well. Ultimately this means more money going into the space so that the very smart engineers and developers have the tools to build the architecture to make the retail investor comfortable with embracing crypto as an asset class.

Digital Asset Strategies Summit: Can you discuss some of the misconceptions advisors have about crypto?

Tyrone Ross: Well where to begin with this?! First of all many advisors and the investment community in general believes that bitcoin is bad, but blockchain is good. I think it’s important to understand that they are inherently inseparable. To embrace blockchain is to embrace bitcoin and vice versa. The second thing you always hear is bitcoin is used for all types of nefarious activity. There has been this stigma since the whole Silk Road fiasco that bitcoin is used to launder money and pay for criminal activity. If you were to do any of these things you probably shouldn’t use an open blockchain to do it! My guess is they would use cash if they were opting to remain anonymous. You also hear a lot about tax implications and rightfully so. Do the exchanges provide tax reporting? Are the coins securities? Are they commodities? The SEC has started to give some clarity around whether bitcoin or ether are securities (they aren’t) and Coinbase has started to provide tax reporting statements and tax calculators for customers. There are also CPA’s that work specifically with cryptocurrency, so advisors should expand their center of influence to include accountants who have an expertise in this area.

Digital Asset Strategies Summit: Thanks Tyrone. We look forward to hearing more of your thoughts at the Digital Asset Strategies Summit October 16 – 17 in Dallas.

Tyrone Ross – If you don’t own the private keys, you don’t own the coins2018-09-19T20:23:09-07:00

Timothy Peterson – Any cryptocurrency’s value is determined by four factors

2018-09-19T20:26:56-07:00

Timothy Peterson | Can Island Alternative Advisors

The 4 factors which determine cryptocurrency’s value

Timothy Peterson is the Founder of and Portfolio Manager for Cane Island Alternative Advisors, which manages global macro investment strategy. He’s an emerging expert on cryptocurrency investment and valuation. We recently sat down with Timothy, who will be speaking at our Digital Asset Strategies Summit (Oct. 16 – 17 – Dallas), as he shared with us his forecast for bitcoin.

Timothy PetersonDigital Asset Strategies Summit: Can you discuss how Metcalfe’s law explains 90+% of price moves of all cryptos?

Timothy Peterson: Metcalfe’s law explains 70-90% of long-term price moves for bitcoin, ethereum, and several others depending on the period examined. It also explains price movements of other peer-to-peer digital assets such as Facebook, Tencent, Paypal, Twitter, and Square. Short term prices are driven by many factors, including “noise”. For periods longer than 60 days, number of users (sometimes called MAUs) are the single greatest determinant of price. For bitcoin in particular, we used 60-day periods since 2011, and exclude periods where documented price manipulation occurred (2013-14 and 2017).

Digital Asset Strategies Summit: Can you explain the various methodologies you use to forecast the price of bitcoin?

Timothy Peterson: Any cryptocurrency’s value is determined by four factors: the number of coins available, the number of wallets or addresses, transaction activity, and a decay factor that represents diminishing marginal returns. It is not driven by things like electrical consumption, google searches, or correlation with other asset classes. Metcalfe believed that growth in users was met with an opposing force which he termed “affinity” and he correctly surmised that affinity declines over time. We have all experienced declining affinity in the form of spam email or annoying Facebook posts. For bitcoin, we have ten years of data with which to forecast user growth. Ascertaining Metcalfe’s affinity value involves some mathematical gymnastics, but it is essentially a logistic decay function.

Digital Asset Strategies Summit: What do you consider the 3 necessary items necessary for bitcoin to survive/thrive?

Timothy Peterson: First, there needs to be a true custody solution for cryptocurrencies. Custody is all about procedures that guarantee the safekeeping of assets. No institutional investor will dive into cryptocurrency until there is a custody solution, and that means far more than just cybersecurity. Custody will also permit true shorting of the currency, which will mitigate some of the volatility.

Second, exchanges need to be regulated with the same degree of oversight as developed economy commodity and equity exchanges. Exchanges today are rife with conflict of interest, inadequate client protections, and weak or nonexistent cybersecurity, disaster recovery, and business continuity plans.

Third, the future of bitcoin does not lie in millions of people buying pizza or cars with bitcoin. Bitcoin’s true value, even today, is as a neutral currency that serves as a place to park capital away from geopolitical risk and monetary system risk. Secondly, it serves as an intermediary currency between the 180+ sovereign currencies and 1000+ cryptocurrencies. It serves as a “digital dollar” between retail investors in much the same way as Ripple does for banks.

Digital Asset Strategies Summit: In April you have stated that you believe “bitcoin, and most other cryptocurrencies, will reach equilibrium value later this year. After that, it should resume a relatively steady upward trend as it has in past years, perhaps earning as much as 60% per year for the next couple of years.” Is this still your forecast?

Timothy Peterson: Yes, we stand by that forecast. That forecast is based on the long-term sustainable growth rate in users, diminishing marginal returns, the rate at which bitcoins are mined, and the rate at which bitcoins are irretrievably lost. Our forecasts come with large variations, so even if we say bitcoin’s value should be $4,000 by December 2018, the range is anywhere from $1,500 to $7,500. Bitcoin’s price is manipulated constantly, so it could be higher, but that is not supported by fundamentals.

Digital Asset Strategies Summit: Thanks Timothy. We look forward to hearing more of your thoughts at the Digital Asset Strategies Summit October 16 – 17 in Dallas.

Timothy Peterson – Any cryptocurrency’s value is determined by four factors2018-09-19T20:26:56-07:00

James McDonald – Bitcoin will NOT be the leading cryptocurrency in the long-term

2018-09-19T20:18:50-07:00

James McDonald | Vishnu Wealth Management

In the long-term, Bitcoin will NOT be the leading cryptocurrency

James McDonald is the Chief Investment Officer at Vishnu Wealth Management, a growth focused Registered Investment Advisor based in Los Angeles, CA. A 22-year veteran of the investment industry, James was named one of America’s top 10 advisors by ETF.COM in 2012. We recently sat down with James, who will be speaking at our Digital Asset Strategies Summit (Oct. 16 – 17 – Dallas), as he shared with us how to manage volatility in the crypto space from an investment perspective as well as the importance of regulation on dampening volatility.

James McDonaldDigital Asset Strategies Summit: How can the extreme volatility of the cryptocurrency market be managed?

James McDonald: Active management currency strategies provide risk-adjusted returns that exceed market benchmarks. Three active management strategies we employ are long-short, statistical arbitrage, and volatility arbitrage strategies. Long-short: In our opinion, there has never been as many disruptive forces at work in a tradable market which impact asset prices as there are today in the cryptocurrency space. Vishnu’s long/short managed account strategy is deployed to capitalize on them. The strategy seeks opportunities where it can exploit weak cryptocurrencies to yield uncorrelated returns with below market volatility. The Long/Short algorithm is calibrated to achieve zero correlation and by allocating capital dynamically. Statistical Arbitrage: Vishnu’s Statistical Arbitrage models identify cointegration relationships exhibited amongst the spreads between the ten most liquid cryptocurrency pairs. Short term departures from this relationship present profit opportunities, which are executed with Vishnu’s effective risk management program. The result is a long/short strategy yielding aggressive performance with moderate volatility. Volatility Arbitrage: As the unfolding of recent political/economic events have illustrated, directional strategies can share factor exposures common across asset classes that can cause a well-diversified portfolio to adversely correlate with factor shocks. It’s precisely such times of market stress that long-volatility strategies yield value to a portfolio. Vishnu’s volatility modeling of the Bitcoin-USD index continues to enhance our cryptocurrency volatility strategies.

Digital Asset Strategies Summit: Do the threats of increased regulation make crypto more or less volatile?

James McDonald: A thriving, liquid and growing financial market demands trust from its participants. No factor toward the long-term growth of the cryptocurrency space is more important than trust. And perhaps no other component of the crypto space has more potential to increase trust than enforceable regulations which protect investors and companies from bad actors. In the short-term, threats of increased regulation may increase the volatility of crypto prices; but in the long-term the establishment and enforcement of regulations that ensure investor protection will reduce the volatility of the crypto market by drawing in more players and engendering a more trusted space for business to transact. This growth will result in more stability and less volatility.

Digital Asset Strategies Summit: Will bitcoin remain the leading cryptocurrency?

James McDonald: For the short-term (e.g. 1-3 years), most likely it will. In the long-term, no. Other currencies will establish themselves as having greater utility, adoption, and potential.

Digital Asset Strategies Summit: Do you see more investors gravitating towards wanting actively managed crypto portfolios?

James McDonald: Absolutely. As the market attracts more established Broker/Dealers, Advisors, and Fund Companies their clients will be introduced to and interested in both actively and passively managed crypto portfolios.

Digital Asset Strategies Summit: What are some of the common misconceptions about bitcoin?

James McDonald: The biggest misperception is that the opportunity to profitably invest in bitcoin has passed. Other misconceptions about bitcoin are that it is a fraudulent scheme, overhyped bubble, and a product without a market.

Digital Asset Strategies Summit: Thanks James. We look forward to hearing more of your thoughts at the Digital Asset Strategies Summit October 16 – 17 in Dallas.

James McDonald – Bitcoin will NOT be the leading cryptocurrency in the long-term2018-09-19T20:18:50-07:00

Thomas Lee – We are seeing a substantial number of institutional grade solutions and technologies being developed

2018-09-19T20:29:32-07:00

Thomas Lee | Fundstrat Global Advistors

Bitcoin $25,000 and the impact millennials will have on digital assets

Thomas Lee is the Co-Founder and Managing Partner at Fundstrat Global Advisors; widely recognized as the only institutional research firm providing comprehensive market analysis and price analytics for cryptocurrencies and blockchain technology. We recently spoke with Thomas, who will be one of our keynote speakers at our Digital Asset Strategies Summit (Oct. 16 – 17 – Dallas), as he shared with us his thoughts about institutional use of cryptocurrencies, Bitcoin reaching $25,000 and the impact millennials will have on digital assets.

Thomas LeeDigital Asset Strategies Summit: Can you discuss how Nomura’s newly announced venture, Komainu, could impact institutional investment in digital assets?

Thomas Lee: The institutional crypto custody joint venture between Nomura and Ledger, Komainu, is an important step to create the necessary array of infrastructure solution necessary for institutional investors to enter the crypto market broadly. There have not been a lot of incremental announcements since May of this year, but both entities have very good reputations.

Digital Asset Strategies Summit: You made a prediction earlier this year that Bitcoin would reach $25,000 by the end of 2018. Do you still stand by that prediction? If so, what are the catalysts that will get Bitcoin to that price as well as what catalysts could prevent the $25,000 price target from happening?

Thomas Lee: We still think Bitcoin can reach $25,000 by year-end. YTD, Bitcoin and the crypto market have fallen, partly due to regulatory concerns but also due to the fact that many “onramps” from fiat to crypto were shut down this year—most US banks and many global banks restricted use of credit card platforms to buy crypto and this slowed inflows. Already confidence is improving. Moreover, it seems that payment processors are developing newer systems (ie, Mastercard filing). But of course, the most important is clarity regarding regulations. This seems to be happening.

Digital Asset Strategies Summit: How close is the industry to institutionally accepted custody solutions?

Thomas Lee: Today, if a traditional financial institution wanted to outsource custody, there are credible solutions and high-quality providers. However, multiple redundant and interoperable solutions do not exist. But we see this coming. We are seeing a substantial number of institutional grade solutions and technologies being developed and this bolsters our confidence that the necessary elements are coming together to support much broader institutional participation in crypto. The efforts are coming from existing exchanges, custody banks, new technologies and existing crypto custodians and wallets.

Digital Asset Strategies Summit: Can you discuss how digital assets will be impacted by Coinbase’s and Circle’s recent moves towards regulatory oversight?

Thomas Lee: It’s a good thing when infrastructure providers are willing to “run towards” regulation. Financial regulators generally prefer to work with SROs (self-regulatory organizations) and when exchanges run towards regulations, it means the industry is creating credible and working SROs.

Digital Asset Strategies Summit: Can you discuss how you believe that millennials will impact the growth of digital assets?

Thomas Lee: Millennials represent 2.5 billion adults globally, or 43% of all people over the age of 17. They are beginning to enter their prime income years and are meaningfully impacting all parts of the economy today. We estimate they will represent 57% of all incremental consumers in the next decade and 72% of purchases of financial products. First Data has estimated they will control $700 billion of financial assets by 2020. Today, less than 1% of that is even allocated to digital assets.

Digital Asset Strategies Summit: Thanks Thomas. We look forward to hearing more of your thoughts at the Digital Asset Strategies Summit October 16 – 17 in Dallas.

Thomas Lee – We are seeing a substantial number of institutional grade solutions and technologies being developed2018-09-19T20:29:32-07:00
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