By Tsering Namgyal
CEO and Founder of crypto blockchain asset research and advisory firm BitSpread Cedric Jeanson spoke to Blockchain Asset Review on how he is pioneering “haute couture” in the crypto investment space by providing clients with cutting-edge, custom-made crypto strategies that suit specific risk profiles. He also discusses regulatory-compliant wealth management platform, Blockberry.com, where investors can deposit fiat and cryptocurrencies to invest in BitSpread’s innovative crypto strategies, as well as the future of blockchain assets and how they are increasingly becoming mainstream.
Q: What makes you different from other blockchain asset management firms?
A: After starting in 2012, we have become one of the biggest crypto hedge funds in the market with US$150 million in assets and more than 100 investors. We started with a market neutral liquidity strategy and expanded to systematic strategies and tracking strategies that we have developed for blockchain assets. We are now working on derivatives based structured solutions such as our “capital protected” strategy. These are similar to products that we used to structure in our previous careers in traditional investment banking. We are replicating these strategies for the crypto market, which will be distributed through our new online platform Blockberry.com.
Q: Why do you think this is the right time to market these new strategies?
A: Our capital protected strategies are designed for investors who are looking to protect capital while not missing the opportunities on the upside. It is quite appealing to the entire community of family offices, wealth managers and private banks. We think this is the product of the moment. Now you have a crypto product that meets a specific investment profile, providing capital protection to those who are hesitant to enter the market due to downside risk but have fear of missing out in the crypto markets. We have done our first world tour, and we have received a lot of very positive feedback from investors and also from distributors who feel that this is the right product for them.
Q: Tell us a bit more about your platform Blockberry.com?
A: This is the first regulated, private banking-style platform where you can invest fiat and cryptocurrencies into innovative crypto strategies. This is not a scheme but a regulatory compliant platform. There are not a lot of such compliant platforms in the crypto space because getting regulated takes a lot of time and it is complicated because you have to do a lot of AML/KYC.
After passing the AML/KYC and compliance onboarding, investors can deposit cryptos (including Tether and Stable Coins) and fiat currency, which can then be used to invest in our different innovative products and investment strategies that invest in blockchain assets. In time we expect that it will also work as a distribution platform for third-party investment products. Products and strategies on Blockberry.com can potentially be in any asset class but at the moment we only provide cryptocurrency investment strategies. We don’t provide, for instance, real estate strategies, for people with crypto assets. But over time we would like to as we see this as a very exciting prospect for holders of cryptocurrency to be able to have Blockberry.com as a single platform through which they can invest in a diverse range of strategies and asset classes.
And these strategies can also be tailor-made. For instance, we can structure products for a small investment bank focusing on cryptos, and such a product can be manufactured and mass-produced and available to investors at their disposal on Blockberry.com. That is really unique and unprecedented. To use a term from the fashion industry we specialize in “haute couture” clothing. In the same way that it is common in Asia that you can walk into a tailor shop and point to a suit on the shelf and say: “I want that one!”, we could say that we are the “haute couture of the crypto world”.
Q: Who are your target clients?
A: Our investments strategies are not for retail. The minimum investment for each strategy is at least of US$100,000 and will only be available to sophisticated investors ranging from high-net-worth individuals, family offices and large wealth managers, and private banks interested in selling those strategies. We already have 25 banks distributing our products in Europe and in Asia.
Our strategies are globally but are restricted either based on investor type or by country of residence. In the UK, for instance, we are regulated by the FCA and investors have to pass a series of sophisticated investor tests to be able to invest in our crypto products. In the US, we are able to offer them as well, except for certain derivative products. In Hong Kong, the products are only offered to professional investors.
Q: You have a strong presence in Asia being headquartered in Singapore. Do you think that Asia has become a major hub for blockchain and cryptocurrencies?
A: We have offices in Singapore and London and we are looking for offices elsewhere as well. I think Asia overall is a very interesting market. I think people are much more interested in cryptos here than anywhere else. Therefore, it is crucial for us to have a strong presence in Asia.
Q: How has the people’s view of crypto changed over the seven years you have been around?
A: When we started around seven years ago crypto was a very bad word but it has now become mainstream. I think people have realized that the ability to send value over the Internet from one address to another is groundbreaking. More protocols being built on such networks as Ethereum means that the price of cryptocurrencies such as Ether that fuel these networks should naturally rise. It is perhaps analogous to the price of oil rising following a new (and fossil fuel-thirsty) car industry being developed.
Q: What is the future of blockchain?
A: I think that many people did not understand blockchain and they have been busy creating a negative perception about it. But they have been caught by surprise as they have come to realize that a major innovation has been happening. They are now playing catch up. JP Morgan recently said that they are planning to issue JPM Coin. We have people who are saying: “we like blockchain but we do not like Bitcoin”. They probably don’t understand blockchain, because the blockchain is designed to be a public network and it works because people are being paid to run this network. And Bitcoin is the currency for the network.
Q: What do you think about “permissionless” networks?
A: When the Internet first started, all the corporations said: “We do not want to be on the Internet. We can start our own Intranet.” But who won in the end – the Internet or the Intranet? When people tell me that we have private blockchain, I tell them: “But you are missing the point!” Maybe they don’t need a blockchain but merely a database of some kind, unless you want to ride the blockchain hype and say that you are in blockchain. I can’t speak for all of the blockchains but many people who have been saying that they want to have a shared database in a closed network are perhaps missing the point. Blockchain is different because it works best as a barrier-less network.