In The News - What Investment - Are cryptocurrencies a good investment?

Expert View - Lee Robinson, principal and CIO of Altana Wealth, considers the crypto universe, bitcoin, and digital money, and asks what's next for digital money and investing.

Digital currencies have had an interesting few years. Where are cryptocurrencies going next?

Alignment of interests is more just having skin in the game. We always invest a sizeable amount alongside our investors. But more importantly when the timing is right we invite our co-investors to redeem and take profits alongside us.

When we launched the Altana Digital Currency Fund (ADCF) in May 2014, it was the first fund to actively trade cryptocurrencies in Europe. Back then Bitcoin was trading at around $450, a year later it was $250, then peaked at $20,000 in late 2017, slumped right back to $4,300, now it is around $32,000 having hit all-time highs of some $63,000 in April. It’s been a stormy, exciting ride and one that’s far from over.

When I first met Alistair Milne, who became the driving force and CIO of Altana’s crypto funds, it was impossible not to be swept away by his passion. What struck me about this new asset class was the opportunity that cryptocurrencies offered in an investment world that was still reeling from the financial crisis.  When you take the time to look at the Blockchain and how it is constructed, you realise just how beautiful yet powerful it will be. The public blockchain was another step in the disintermediation trend we believed would impact all sectors of the economy over time.

This was a true alpha generator. In 2014 Bitcoin was an absolute asymmetric bet and I haven’t seen many as good in my 25+-year career. Yes, there was a chance that you could lose everything but the upside could be a 10x multiple, perhaps even more.

I was wrong. Since inception to the end of May 2021 the fund has returned 5,920% net of fees (1,496% in 2017) consistently outperforming a passive investment in Bitcoin. During my career I have seen and profited from a number of extraordinary financial events, including the dotcom bubble and the financial crisis of 2007-8, but I have never seen comparable returns. This has been the best performing asset over a ten-year period…

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