by Joseph Young
TOBAM, the Paris-based investment firm with over $8.8 billion assets under management, has launched the TOBAM Bitcoin Fund, as a part of a broader initiative to diversify its assets across a wider range of markets.
Christophe Roehri, Head of Business Development at TOBAM, explained that in the short-term, the company would finalize on the platform it will use to trade bitcoin. Given that multi-billion dollar investment firms are required to invest a minimum of hundreds of millions of dollars in a particular asset, the company will need to find a platform that can handle institutional money and large investments.
Currently, there exists two exchanges targeted at institutional investors, Coinbase Custody and LedgerX. Coinbase Custody enables institutional investors and retail traders to invest a minimum of $10 million in bitcoin and other cryptocurrencies. According to Coinbase CEO Brian Armstrong, the exchange already handles $9 billion in customer funds on behalf of both general consumers and large-scale investment firms.
“We already store billions of dollars worth of digital assets on behalf of our customers. We serve thousands of institutions via our GDAX product, the leading digital currency exchange in the U.S. We’ve raised $216 million from venture capital firms and financial institutions like the NYSE/ICE, USAA, BBVA, Westpac, and MUFG,” said Armstrong.
The other exchange, LedgerX, is similar to the CME Group’s upcoming bitcoin futures exchange, in that it is regulated and strictly overseen by the US Commodities and Futures Trading Commission (CFTC). LedgerX already handles millions of dollars in investment on a weekly basis.
Hence, for investment firms like TOBAM, liquidity is becoming less of an issue for investing in bitcoin. In the upcoming months, Roehri emphasized that the company will allocate a significant portion of its resources and capital in research and development targeted at bitcoin and other cryptocurrencies.
“Bitcoin being a highly diversifying asset, this launch is also an expression of our commitment to diversification in all its forms. Once again TOBAM is ahead of the curve and, in order to remain so, we will continue to reinvest a significant part of our growth into research and innovation for the best interest of our clients,” explained Roehri.
But, Roehri stated that the company is still in the process of developing policies in regards to potential network altercations and protocol updates such as hard forks, that lead to chain splits and the creation of new digital currencies. For instance, the Bitcoin Cash and Bitcoin Gold forks led to the distribution of BCH and BCG. For investment firms with significant capital, the process could become more challenging, as they would have to decide on behalf of their clients to sell the newly credited cryptocurrencies and purchase more bitcoin with the funds, or leave the cryptocurrencies and allow them to grow.
Yves Choueifaty, President of TOBAM, noted that the company has continuously researched the technical, financial, and economic aspects of bitcoin, to ensure that it can create a stable fund for its investors:
“Research is the founding pillar of TOBAM, and we have conducted research from a technical, financial, economic, and regulatory point of view on Bitcoin for a year prior to launching this fund. This first move in the world of cryptocurrencies showcases our dedication to remaining ahead of the curve and to provide our clients with innovative products in the context of efficient (i.e., unpredictable) markets.”
With both medium and large-scale investment firms such as TOBAM, Fidelity Investments, and Man Group taking note of bitcoin and getting ‘hands-on,’ the liquidity of bitcoin will increase exponentially in the mid-term, as the market grows and matures.