Three vantage points have given me an insider’s insight into the growing cryptocurrency sector and who are the likely winners and losers. As an investment manager, I regularly get to see the latest innovations − both good and bad − early. Even a curmudgeonly bear would have kind words to say about the incredible number of new disruptive technologies changing the world including DNA sequencing, virtual reality, drones, 3D printing, robotics and blockchain. None would have been possible without the incredible innovations in microprocessor power over the last 10 years.
In September 2017, the market capitalisation of all cryptocurrencies briefly passed $150 billion. Adding in the value of the exchanges and other ancillary companies the cryptocurrency industry is conservatively worth >$200 billion and growing daily.
My company, Altana Wealth, runs a cryptocurrency trading vehicle (Altana Digital Currency Fund), lends margin to bitcoin traders (Altana Digital Services) and has co-invested in blockchain ventures such as futures exchanges and ATM providers. Over the past three years our clients have benefited from the growth in cryptocurrencies to the tune of ~1000%.
I’m a member of the Young Presidents Organisation, a global platform for chief executives to engage with more than 25,000 members in over 130 countries. In May, I moderated the blockchain panel at their annual fintech event. Amongst a very sophisticated audience discussing a diverse range of subjects (including robo-advisors and peer-to-peer lending) the least followed or understood of all was bitcoin/blockchain.
So, while bitcoin may be a disruptive booming technology, it is not yet properly understood and as with all innovations, it needs to have a profitable niche to grow.
The initial, most common reaction I receive is: “I don’t understand blockchain”.