The benefits of utitlizing a professionally managed firm to deploy capital in the Cryptasset investment space.
This is a question that has probably crossed the mind of almost every prospective Cryptoasset
Hedge Fund investor. In order to appropriately address the question, however, it is important to
identify exactly where this question originates from. Simply put, this question arises from a lack
of knowledge and education in the digital asset investment space. One of the biggest barriers
we face, as Fund managers (and investors of our own portfolios), is the difficulty in connecting
with other prospective investors, whose comfort zone often lies within traditional markets and
investment spaces. Although digital assets and cryptocurrencies, as an investment class, are not
“new” to most investors, the industry itself is still in its infancy. As such, the space will
inevitably experience increased volatility and growing pains, until solid footing is established.
The evolution of the cryptocurrency space that has occurred over the past decade has been
nothing short of spectacular. Everything from exchanges, their security and the way they
operate, to initial coin offerings (ICOs) and institutional adoption on a grand scale. Change is
happening at an unprecedented rate, both internally and existentially. Over the past 9 months
alone, we’ve seen massive changes in our national and global economies, as well as many of the
shortcomings in our outdated monetary policy. We now give thought, on a daily basis, to an
array of topics and events that just one year ago might have seemed like a bad science fiction
movie. Every one of us has altered or adjusted the way we do business and how we conduct
ourselves, whether it was voluntary or otherwise. This all begs an additional question….
Doesn’t it make sense to do everything in our power to take full advantage of any opportunities
available to us in times like these?
With that out of the way, and now that we’ve added some context to our initial question, we
can address it head on. Sure, anyone can invest into Bitcoin and other digital assets on their
own. If you’re just purchasing the equivalent of a few thousand dollars, then this might be the
most efficient thing to do. Assuming you’ve done your due diligence on which exchange(s) you
should and shouldn’t use. There are still, to this day, mainstream and popular exchanges that
suffer security breaches on a regular basis. There is even a popular U.S. based exchange, owned
and operated by the parent company of one of the largest and most prevalent digital asset
investment firms, which suffers repeated lengthy outages each time one of their supported
assets experiences significant gains or losses (we have opted not to include the name of the
exchange, investment firm or their parent company). As hard to believe and unacceptable as it
may be, these events are still commonplace in our industry. Additionally, transaction fees will
certainly play a role in any investor’s experience. These can range from 1% or less, all the way
up to 5 or 6%+ per transaction.
Once an exchange has been chosen and assets have been purchased, it is very important for
every investor to have a plan in place which ensures safe and secure storage of their assets,
while still providing appropriate access for an exit strategy. This is where things can become
tricky for new investors. While every investor’s situation and needs will vary, the importance of
securely storing and looking after this type of investment cannot be overstated. It is for this
reason that Cloud Fire Capital opted to partner directly with a third-party cyber security firm,
despite the managing partner’s many years of experience within the digital ecosystem.
In the interest of full transparency, the aforementioned barely even scratches the surface
relating to what is ultimately required to successfully invest in and maintain a robust and secure
digital asset investment portfolio. This is not meant to deter those interested in the space from
investing but, it is rather meant to bring attention to the importance of research, due diligence
and planning. It is entirely possible for anyone, from any walk of life, to participate in the digital
asset investment landscape on their own. Cloud Fire Capital merely provides a more carefully
managed, ultra-secure vehicle for doing so. Our overall interest is that of our investors. Our
fees are moderate and fair. Our value is our cohesiveness, attentiveness and awareness. We
value the opportunity to shepherd newcomers into this unique landscape, and our confidence
in the digital asset investment space over the next several years is only overshadowed by our
To be clear, there is much to be gained from learning new skillsets and removing oneself from a
comfort zone. And those with an appropriate level of technical knowledge would be
well-served to allocate some of their investment capital into Bitcoin or another digital asset. In
any event, Cloud Fire Capital is here to provide assistance and guide investors as needed, so feel
free to reach out to us. Come December of 2021, you will be very glad that you did.