Guest Post By Bill Ulivieri/ Cenacle Capital Management
When I started at the CBOE as market-maker in 1982, much of my time was spent managing a large portfolio of stocks, options and futures in a variety of volatile market conditions. As exciting as it was, it made the transition to independent RIA in 2004, a little easier since I was familiar with how markets operated.
However my latest transition in the past 16 months has been the most exciting of my career. In October 2016, I jumped into the “deep end” of Bitcoin and blockchain by learning how to mine cryptocurrencies. In the summer of 2017, I formed a local Meetup group for Bitcoin and blockchain enthusiasts; and in the last 6 months, given scores of presentations on why I believe Bitcoin (and blockchain) are going to disrupt…everything.
Pivoting quickly is one reason I decided to launch the Blockchain Enterprise Investment Strategy. I believe blockchain technology is the most profound innovation of our generation.
Our separate managed account strategy consists of about 30 listed U.S. companies and ADR’s providing software, hardware or consulting services seeking to monetize the coming revolution of public and private blockchain technology.
Over time, scores of cryptocurrencies will someday achieve their stated utility purpose; however history tells us the “big keep on getting bigger”. There is a great opportunity in the coming decade for investors to capitalize on established, U.S. based companies who are pivoting their business model, and leveraging blockchain technology to increase shareholder value.
The shift to blockchain as an asset class is already underway with the CME Group announcing Bitcoin futures contracts to begin trading in December, and with the Chicago Board Options Exchange right behind them. Several well-known companies have filed their intentions with the SEC to create blockchain-centric Exchange Traded Funds. (ETF’s)
While crypto anarchists hope to disrupt the banking and financial services industry, a person only needs to look around to realize it’s the small trader that has disappeared from the trading pits; it’s the small, independent RIA’s who struggle to attract AUM against massive firms like Blackrock and Vanguard with almost $9 trillion in combined AUM.
Ultimately, this type of competition is highly hierarchical in nature and an investment committee may not provide the insights experienced cryptocurrency miners can provide. The second iteration of our strategy will include “polling” clients for suggestions of companies for inclusion in the portfolio strategy.
As miners and advisors we understand the power of distributed consensus; rather than hierarchy as one way to participate, at least philosophically in blockchain.
Cenacle Capital Management, LLC