Something I’ve been looking at for a while in my role as CEO of First Global Credit is the way that we can use public blockchains to the advantage of people I would class as “Passive Investors.” These people are sophisticated, so they understand that where there is outstanding potential there is likely to be commensurate level of risk, but they also know that cryptocurrency trading is presenting the kind of opportunity that has not been seen in the markets for quite a few years.
With this in mind I’ve started working on a project with some very creative developers who have unique experience to draw on. Combining my knowledge of markets and trading systems we have kicked off a project that we believe, when delivered, will combine the benefits of model based trading as used by some of the leading funds in the world coupled with an investment programme that utilises “the wisdom of the crowd” to select promising startups in the public blockchain space. The combination of these two paradigms working hand in glove provides not just the potential for significant returns but also benefits the cryptocurrency ecosystem as a whole.
The concept is, in principle, pretty straightforward.
We will raise funds that will be placed into an investment pool which will benefit from the existing coin security policies we already have in place for First Global’s other business areas. These funds will be used to trade an assortment of the world’s leading cryptocurrencies. This will form the first part of the pool’s profit generation strategy.
The models will trade these coins and, at the end of each month, we will take 50% of the profit and plough that back into the trading pool to increase the money available to the models. But the other 50% will be set aside to be used to seed new companies in the public blockchain space. This forms the second part of the investment strategy.
First Global Credit will create a forum where founders of interesting public blockchain companies can present proposals. We will utilise the combined expertise of our investors which we believe will allow us to use the “wisdom of the crowd” effect to guide the investment pool into promising startups and create exceptional returns for the pool over time.
The beauty of this approach, is that the system based trading generates the capital which is then used to invest in the riskier proposition of seed startups. So the investors themselves should benefit from the cryptocurrency trading strategy and also not have to reach into their pockets to benefit from the potential of early stage company investment. There is also the added benefit that we are giving opportunities to public blockchain companies which have been previously limited to relying on VCs and fintech accelerators who tend to be interested in funding banking / private blockchain comanies for their investments.
Like I said, it’s early days – we have a live account that has been trading the first part of the plan – the system based cryptocurrency trading. When we are happy with the performance achieved by these models we will consider the structure of the investment pool – whether open or closed to subsequent investments and how the voting mechanism for company seed investment should operate.
We are truly living in a period of massive change where individuals can influence the investment choices made on their behalf – I believe the blockchain provides that mechanism and those opportunities.
What do you think about this idea? Email us.