By Barry Ellsworth
A new investment fund launched Thursday in Vancouver says it is the first in the world to accept cryptocurrencies such as bitcoin and invest them in private companies.
Bitcoin, the most well-known of digital currencies, has been on a rollercoaster ride, dropping to US$10,000 Wednesday or half the US$20,000 high in December. As of 1 p.m. ET Thursday, it had surged to US$12,000, once again proving the volatility of the currency.
Marcus New, head of InvestX Financial (Canada) Ltd., said such volatility could wipe out an investor in quick order and that diversifying is the insurance against such a loss.
“They need to diversify – take a portion of the profits and do what Mark Cuban did,” he said, referring to the American billionaire who got out before the dot.com bubble burst.
“What we’ve tried to do is make it easy for them.”
Many funds will take the currency of a country (fiat) and invest it in bitcoin, but New said InvestX is the “first-of-its-kind” world equity fund to do the opposite – take bitcoin and invest it in companies.
“We all know the tragedy that happened for everyone that had all their money in dot-coms and how little of it they kept,” he said in a release.
“What we’re saying is that cryptocurrency investors need to take at least 20 percent of their profits and diversify it.”
New hoped to raise US$100 million.
The fund will accept bitcoin and other cryptocurrencies such as Ethereum, Litecoin and Dash. It will invest in 12 to 15 private companies that have a value of at least US$1 billion with a targeted growth rate of at least 40 percent. The firms must also plan to make an initial public offering of shares.
Bitcoin is a digital currency and world money system with no physical presence like gold. It was created in 2009 by an unknown person calling himself Satoshi Nakamoto. There are no banks involved in transactions and no taxes paid to governments.
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