Avoid the Fast and Loose with Cryptocurrency, Blockchain, and ICOs

www.arrivatollc.com – it is hard to ignore discussions about cryptocurrency, blockchain, and ICOs these days.

In the family office community, it is being discussed more frequently within our circles.  Lots of people are curious, many have questions. We are being targeted constantly by all the sales pitches – especially by ICOs.

Here are some of my rough thoughts from a family office perspective:

Avoid the fast and loose. I do not like what I call the hoodie generation running around dressed like slobs pitching people like they belong to some cool, deep, dark secret society.

Yes, there are a handful of colorful characters who have created generational wealth through cryptocurrency.  Can you simply replicate their strategy?  I would not attempt.  Just like everyone believes they are the next Mark Zuckerberg, there is only one out of thousands who make any mark in his world.

I witness a lot of people traveling the country trying to look cool and hip; hitting all the conferences as well. Look beyond the emotion and see what their track record has been, not only in cryptocurrency, but in business and life.

Ask yourself the question on whether this is the person or group you want to align with.

In terms of cryptocurrency, it takes a sophisticated strategy to win the game.   I have friends of mine who are playing a very safe, long-term strategy. And at the same time, I have a couple very sophisticated friends who have quant strategies backed by proprietary artificial intelligence in which they dominating the market right now and have so for the past five years.  The next stage in the coming months will be the entrance of the institutional market.

I believe there is a lot of buyer beware with ICOs.  At the same time, there is a lot of amazing opportunities and profits with ICOS.  As I previously mentioned, it is all about who you align with. A lot of us in the family office community are being targeted with investment opportunities that are backed by mediocre people with no track record and poor business fundamentals, but the use the term ICO to make it sound enticing.  I believe this is simply lipstick on a pig 9 out of 10 times.

When evaluating ICOs, there are two sides of the equation.  Evaluate the fund strategy or investment strategy itself without the tokens.  (1) Is this a management team you can believe in?  (2) Is the strategy viable?  (3) Are the economics viable?  (4) Is the leadership and strategy scalable to ensure the tokens will have tradable value?

In terms of the token portion itself, you must understand the governance and compliance behind the actions of the managers. There are several very serious and direct due-diligence questions that must be addressed from that standpoint alone.

In fact, from the perspective of a manager, there are a lot of ventures that honestly are better off not going the token route.

Here are some of my final thoughts from a family office perspective:

Fortunately as with any endeavor, our inner circles within the family office community are identifying the best of the best professionals to align with and get educated by. In fact, some of them are setting time aside in closed circles to educate us on different aspects of this industry.

From a personal standpoint, I am connected to some of the original investors in cryptocurrency, blockchain, and ICOs.  These are people that not only have been the most successful in this space, but have a long track record of being sophisticated institutional investors at the highest levels of the global scale over the past 20 years.  I am also connected to founders of some of the top currencies in the market.

With that being said, I trust these people with currency strategies and picking the best in class ICOs at the best prices.

What’s next?

I am excited by the next stage of disruption. I believe this summer you will see some breakthrough blockchain technologies that will decentralize processes within traditional services and market prediction strategies.

Through my inner circles, I already have a good idea what the next big story will be and fortunately it comes through some of our most sophisticated friends.

Last Thoughts:

There is a lot of white noise out there with all the sales pitches, conferences emerges, and a lot of hype. Through all the smoke, we have been able to quiet the noise, and identify the most sophisticated, talented, and best performers in the industry.

My advice…be very careful who you align with.

Let’s Talk.

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