The family office perspective on investing in crypto and blockchain

BSV Blockchain and Unbounded Capital Logo over red blockchain

The BSV Blockchain Association recently sponsored the first Unbounded Capital Summit in New York City at Dream Downtown. The exclusive event was invite-only and featured some 80 attendees including prominent venture and hedge fund managers, fintech and blockchain entrepreneurs, and institutional and family office investors.

The summit was hosted by Unbounded Capital to help promote a network and provide excellent opportunities for on-chain companies to meet experts and investors.

One of the keynote panels at the event was hosted by Samira Salman (CEO of Salman Solution) on the topic of family offices and investing in blockchain technologies. She was joined by Brent de Jong (CEO of Qenta) and Kurt Overley (CIO of the Coruscant Family Office).

Overley noted that he has always been interested in blockchain technology. He added that the volatility of some crypto assets is attractive from an investor standpoint and that it is possible to make money over a shorter term. Longer term, Overley is very bullish on the technology and its potential to disrupt several sectors.

‘We think this is going to revolutionise and disrupt so many different industries and I think it is by far and away that this is one of the biggest things in my lifetime that I can get in on early enough and take advantage of.’

Investing in ideas vs companies

De Jong said that half of his current portfolio is broadly invested in ‘fintech’ which includes blockchain and other technology-enabled businesses. He noted that compared to other sectors, many of these businesses are ‘conceptual’ in nature. In the early days of blockchain, this meant that many companies were technology-driven rather than utility-driven.

‘Today you can focus a lot more on the problem you are solving and why a consumer or businesses will see the value and pay you for that. We spend a lot of time today around those solutions and why adoption is not going to be overly expensive. We are looking at the business use cases.’

When considering a blockchain investment Overley said his family office does not underwrite ‘blue sky projects’ and businesses must have a finished product. He added that businesses should also have a pipeline of customers who are familiar with the product and eventually act as a source of revenue.

One blockchain to rule them all

Overley said he has taken the position that 99% of blockchain protocols are likely to fall away in favour of a singular chain – the BSV blockchain. This makes investing in other crypto assets generally a bad idea.

He added that the ‘death’ of other blockchain protocols is likely to be a slow and drawn-out process, and not the type of implosion seen with stablecoins and exchanges in the recent past.

De Jong is not as convinced that a single blockchain protocol will come out on top, but that there will be a much smaller number of blockchains which come to define the space. He added that this is likely to be split among digital currencies which are held by and offered by national governments, in addition to the separate protocol-based blockchains we see today.

‘That will drive liquidity and people will make choices about where to store their value based on different things. This could be politics, friends or family or who you do business with.

‘If you look at other sectors such as telecommunications and banking, usually what happens is that the top three make 85%-90% of the money, there is a fourth or fifth company around, and the rest will struggle.’ He said this was a product of natural market forces and tends to occur across the world in a multitude of different sectors. Naturally, the blockchain sector is also on this path but the exact route it takes to get there will be dependent on several factors, he said.