Family Offices See Legitimacy in Securitized Bitcoin Investments

Investors with over $1tn in assets under management gathered at an event last night to judge if bitcoin is ready to be recognized as a mainstream asset class.

Onstage, the event looked like countless other bitcoin demo days, but it was what transpired between the panelists and the audience of 110 estimated family offices investors, hedge fund investors and private equity firms that gave it a decidedly different twist.

Myles Edwards, who represents ultra-high net-worth individuals and co-founded the New York Family Office Private Funds Roundtable, said his firm organized the event to learn more about digital currency as it is interested in a wide range of securitized investments.

Edwards told CoinDesk:

"What really intrigues us about tonight is that there is a clear synergy, a clear nexus between what’s happening in the digital world, and what’s happening in financial services. And that is going to be the catalyst to bring us to the next generation."

Edwards, who is also general counsel at financial advisory firm Shufro, Rose & Co, said he couldn’t mention specific hedge funds which had begun to securitize the assets. But he added that the high-net-worth members of the Roundtable saw the existence of such investment packages as a stamp of approval.

"There’s legitimate hedge and private equity funds that are ready to invest," he said. "They’ve done their due diligence and that's got people’s attention."

In 2014, bitcoin made headlines as the worst asset class of the year, beating out the Russian ruble, according to a widely reported Quartz article. But in 2015, the cryptocurrency was barely a blip on the best and worst investment lists of the year, leading to an even steadier 2016.

So far, this year bitcoin's price has fluctuated between about $458 and $358, but it has mostly hovered around its current price of $418.

Future possibilities

Hosted by blockchain consultancy firm Agentic Group at the newly opened Citco Gateway Offices on Park Avenue, three companies representing a wide range of bitcoin and blockchain services took questions from audience members.

Main concerns related to financial regulations for bitcoin investments and HIPAA compliance concerns for medical-related applications of the blockchain.

In attendance were industry-specific consultants specializing in blockcahin and cryptocurrency asset management as well as more traditional outfits, such as FINRA/SEC licensed broker dealer Young America Capital and Breckenridge Insurance Group.

Rik Willard, managing director and founder of Agentic Group, said that while some family offices remain hesitant to invest in bitcoin and blockchain-related products hedge funds are increasingly looking to the asset class on a time horizon of between two years and five years.

"You don’t hear a lot about family offices in blockchain, you don't hear of them in bitcoin, for a reason. VCs have their own way of looking at this market," said Willard. "But there’s trillions of other dollars out there looking to the future. To leave that untapped, unaddressed seemed to me pretty wasteful."

Piggy bank image via Shutterstock