CRYPTOCURRENCIES Big Profits, Big Risks, Big Impact May 2018 Monty - - PowerPoint PPT Presentation

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CRYPTOCURRENCIES Big Profits, Big Risks, Big Impact May 2018 Monty - - PowerPoint PPT Presentation

Mar 12, 2024 114 likes •442 views

CRYPTOCURRENCIES Big Profits, Big Risks, Big Impact May 2018 Monty Guild, Rudi von Abele, and Tim Shirata BOOTH 225 Guild Investment Management is a registered investment advisor with more than four decades of experience helping its clients

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CRYPTOCURRENCIES

Big Profits, Big Risks, Big Impact

May 2018 Monty Guild, Rudi von Abele, and Tim Shirata BOOTH 225

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Page 2 12400 Wilshire Blvd. Los Angeles CA 90025 guild@guildinvestment.com 310.826.8600

Guild Investment Management is a registered investment advisor with more than four decades of experience helping its clients manage their wealth. One of the ways we serve our clients is by closely monitoring critical developments in global social, economic, political, and technological trends. Members of the Guild team have had a personal interest in cryptocurrencies since 2009, and Guild has been covering cryptocurrencies in print and presentations since 2013.

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INTRODUCTION

Monty Guild Chief Investment Officer, Guild Investment Management, Inc.

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  • Survival of the fittest during an evolutionary shift: like

dot-com stocks, most cryptos will not survive.

  • Governments will ultimately be leaders in creating

cryptos, to facilitate tax collection and data harvesting.

  • Cryptos will experience major shifts due to rapid

innovation in distributed ledger technology, and eventually due to quantum computing.

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WHAT ARE CRYPTOCURRENCIES, AND HOW DO THEY WORK?

Rudi von Abele Senior Analyst, Guild Investment Management, Inc.

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What They Are

  • Cryptocurrencies: A New Asset Class
  • Technological Origins: Internet, P2P, and

Encryption

  • Social and Cultural Origins: Hackers,

Libertarians, and Criminals

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  • Cryptocurrencies As Fintech (Financial

Technology)

  • Cryptocurrencies and Government
  • Cryptocurrencies as Medium of Exchange

and Store of Value

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How They Work

  • A distributed ledger of actions/transactions
  • A system for arriving at “trustless consensus”
  • Associated marketable “coins” or “tokens,”

some with uses within the network

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Challenges and Risks

  • Euphoria and Irrational Exuberance
  • Separating the Wheat From the Chaff

(Coins With Real Use-Cases vs. Sh*tcoins)

  • Decentralization vs. “Organic” Centralization
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  • Scalability
  • Energy Consumption (For Proof-of-Work

Algorithms)

  • Game Theoretic Problems
  • Over-engineering: “The iron will of

unstoppable code”

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  • Over-engineering: “The iron will
  • f unstoppable code”
  • Regulatory Landscape and Crackdowns
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CRYPTOCURRENCIES: The Current Environment and What Comes Next

Tim Shirata Executive Vice President, Guild Investment Management, Inc.

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Exchanges

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Exchanges

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Exchange Risks

Hacking Technical Maintenance Overwhelming Customer Requests Terms and Conditions Insider Trading / Employees of Exchanges

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Alternative Storage Methods

Online Wallets Mobile Wallets Desktop Wallets Hardware Wallets Paper Wallets

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What is an ICO?

Initial Coin Offering

Brief History 2014 7 projects total raise $30 million (Ethereum $18M) 2016 43 projects $256 million (DAO $150M (Hack $60M)) Today Total Market Cap for Crypto $438 Billion (coinmarketcap.com)

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What is an ICO?

Benefits Innovation in capital fund raising Settlements over the blockchain Liquidity Democratizing investment

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What is an ICO?

Risks Uncertain regulation Easily manipulated Lack of due diligence Overstated token valuations No guarantee projects will be developed

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What is an ICO?

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Security Tokens

The U.S. Securities and Exchange Commission (SEC) has stated that security tokens are subject to the same federal legislation that regulates traditional securities. Nevertheless, a small percentage of the currently available ICO startups boast the resources needed to issue security tokens that can comply with SEC’s securities regulations. Failure to comply with these federal regulations could lead to legal punishment of the startup’s founders, and could even result in termination of the whole

  • project. On the other hand, compliance with the regulatory
  • bligations opens the door to a multitude of applications for

security tokens, especially the possibility to represent a company’s shares, or stock, via cryptographic blockchain based tokens.

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Security Tokens

The Howey Test

1 - Does the token offer its holders an opportunity to contribute to the startup’s capital and to have a share in its profits? 2 - Does the ICO’s fundraising procedure involve investment in a project whose profits are solely generated from the efforts of individuals other than the creators or founders of the project?

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If the answer to either question is “yes,” then the token can be definitely categorized as a security token that is subject to SEC’s securities regulations and other forms of Federal laws regulating securities.

Security Tokens

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Regulation of Cryptos

What is decided today, may change tomorrow. This is a evolving asset class and we can only see more regulation coming in the coming months and years. Regulation is NOT BAD.

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Identifying Industries That Can Implement Blockchain In Valuable Use-Cases Financial Industry Gaming Entertainment Transportation Education Legal

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Summary

Cryptocurrency will face some challenges from a technological standpoint and the regulatory environment will evolve. New cryptocurrencies may created to address those pain points, and new protocols are being developed to try to address those pain points for existing cryptocurrencies. (It will take time.)

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Regulation of cryptocurrency is good for the asset class. Institutional money will enter into the space when there is a solid infrastructure. Cryptocurrency is a highly speculative asset class, and one must understand that any investment into the space could lead to 100 percent losses.

Summary

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Digital money will be the future. Be cautious of ICOs and do your homework. Blockchain will revolutionize certain industries, sectors, and companies. (It will take time.)

Summary

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Want a copy of this presentation? Visit www.guildinvestment.com/ moneyshowcrypto/

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Visit us at Booth 225.

Guild Investment Management can help you reach your financial goals. Contact us today to schedule a portfolio review. guild@guildinvestment.com 310-826-8600 www.guildinvestment.com

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