Page 153 - Bespoke Issue

BRAVE NEW WORLD
We talk to our own Christopher Dunhill about his plans for a new Dunhill-X-Change for crypto currencies in his foray of investing into crypto startups and related technologies.
can be more secure than the traditional payment systems.
Still others like the anonymity of the blockchain network, which allows for transactions outside government surveillance. Sadly, this includes criminal activities which is why I believe there is much controversy from Governments and banks.
I believe that the most compelling reason is that speculators like cryptocurrencies because they’re going up in value and have no interest in the currencies’ long-term acceptance as a way to move money but simply a moment in time to make money. Just another form of stock market trading.
PL: Would you say that they are they a good investment?
CD: Well, I don’t purport to be an investment advisor to the public, but in my own mind I consider that cryptocurrencies may go up in value, but many investors see them as mere speculations, not real investments. The reason? Just like real currencies, cryptocurrencies generate no cash ow, so for you to pro t someone else has to pay more for the currency than you did. That’s what’s called “the greater fool” theory of investment. Contrast that to a well-managed business, which increases its value over time by growing the pro tability and cash ow of the operation. However, in summary, you can’t deny the amount of millionaires and billionaires that have been made from the crypto markets.
For those who see cryptocurrencies such as Bitcoin as the currency of the future, it should be noted that a currency needs stability so that merchants and consumers can determine what a fair price is for goods. Bitcoin and Ethereum have been anything but stable through their history. For example, at the start of 2013 a Bitcoin traded for $13.50, while in January 2018, it changes hands for around $16,000. These are amazing increases in value perception. On the ip side, pragmatic and traditional investors would run a mile from investing in these volatile products.
This price volatility creates a conundrum. If Bitcoins might be worth a lot more in the future, people
are less likely to spend and circulate them today, making them less viable as a currency. Why spend a Bitcoin when it could be worth three times the value next year?
PL: Can you explain to use how to buy cryptocurrency?
CD: Sure...there is nothing dif cult to acquiring a cryptocurrency — and there are many issued by many different companies. Generally, users exchange Bitcoin or Ethereum. To buy either of these cryptocurrencies, you’ll need a “Bitcoin wallet,” which is an online app that can hold your currency. You register with your identity and bank details, then you can transfer at currency, probably better considered as real money, to buy cryptocurrencies such as Bitcoin or Ethereum.
But you don’t have to buy them directly. Some investment companies have created Bitcoin exchange-traded funds, and more are being designed, so investors could purchase into a fund that holds Bitcoin, much the way they would buy and sell stocks and shares. This would be a relatively simple way to access the currency, and you’d likely be able to trade through your existing broker.
There’s a new third option, introduced in December 2017 where investors can now buy and sell Bitcoin Futures, allowing you to buy or sell Bitcoin at a speci ed future date for a predetermined price. The crypto market is certainly adopting some of the sophisticated platforms of the traditional banking world, and this is one of the key interests which I have in seeing how this environment is developing and evolving.
PL: Are cryptocurrencies legal?
CD: (Laughing) There’s a very changing platform in the world of cryptos. Well, there’s no question that they’re legal in the United States, but China has recently outlawed their use, and ultimately whether they’re legal depends on each individual country. Also, be sure to consider how to protect yourself from fraudsters who see cryptocurrencies as an opportunity to milk investors from vapour and Ponzi products which certainly are not legal.
The SEC has been increasing its regulation of coin offerings and cryptocurrencies generally and that’s good news for investors, since this will help to weed out fraud and protect investors. But as always, buyer beware.
PL: You have announced that you are entering this so called Crypto-World. So what’s your strategy for it?
CD: To start with I am looking to buy interesting cryptocurrency via ICO’s, and my team studies the ne print in the offering company’s prospectus to gather information like;
Who owns the company? An identi able and well- known owner is a positive sign.
Are there other major investors who are investing in it? It’s a good sign if other well-known investors want a piece of the currency.
Will you own a stake in the company or just currency or tokens? This distinction is important. Owning a stake means you get to participate in its earnings (you’re an owner), while buying tokens simply means you’re entitled to use them, like chips in a casino.
Is the currency already developed, or is the company looking to raise money to develop it? The further along the product’s development, the less risky it is.
It can take a lot of work to comb through a prospectus; the more detail it has, the better your chances it’s legitimate. But even legitimacy doesn’t mean the currency will succeed. That’s an entirely separate question, and that requires a lot of market savvy.
I’m also planning to invest in Blockchain based projects and will soon be hosting pitching sessions to invite Tech Entrepreneurs.
And it won’t be long before you’ll be able to engage in my own Dunhill-X-Change for crypto trading. So just watch the space! These are exciting times.
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