Cryptocurrencies are a nascent asset class, so the wisest approach is to invest across the entire ecosystem in a very diversified way. This is the view of billionaire Alan Howard in an interview with The Block.
“You must be in the crypto world and have an understanding of it to understand what is happening there, identify the problems and opportunities you will face, and know what infrastructure will have to be built to cope with them,” he noted.
The billionaire confirmed that he remains “actively involved” in various initiatives of BH Digital — a unit of Brevan Howard Asset Management. The structure launched in September 2021, and at the time of writing assets under its management had surpassed $1 billion, according to the publication.
“BH Digital reflects my belief in the importance of investing across the entire ecosystem, regardless of instrument (for example, token, equity, NFT and so on), in a diversified way with good risk management. This ensures that the stream of your income will never depend on a single strategy, theme or person taking on risk,” the billionaire explained.
For target investment segments Howard named stablecoins, gaming and metaverses, DeFi, security of smart contracts, marketplaces and cross-chain tools. In his words, in the future BH Digital will deploy market-making capabilities to support new tokens, providing “initial liquidity”.
“We believe that our 20-year history and legacy as an active derivatives trader gives us a huge advantage in investing in DeFi,” Howard stressed.
He noted that venture investing and liquid trading on the crypto markets “should be regarded as parts of one universe.”
Howard added that BH Digital takes engagement with the community seriously and provides portfolio companies with the necessary assistance.
In particular, he mentions the research incubator Web N Group. It targets mass-market projects and offers aspiring crypto-entrepreneurs development support and legal advice to scale their ideas.
Another direction is Elwood Technologies. The firm has developed an institutionally oriented platform for access to the digital asset market—from connecting to various trading venues through API to execution, reporting and analytics.
“Elwood was created to meet the market’s acute need for institutional-grade infrastructure […]. The crypto infrastructure has (and remains) largely oriented toward the needs of retail traders. […] I wanted institutions to have easier access into the space of digital assets,” Howard noted.
Earlier Elwood Technologies agreed with Bloomberg about a “strategic integration” into Bloomberg’s order management system and attracted $70 million from Goldman Sachs, Barclays and others.
Currently Elwood’s client base counts more than 30 companies, including fintech firms and neobanks that manage assets, hedge funds and crypto exchanges.
As previously noted, Alan Howard participated in rounds of financing for the custody service Komainu, its competitor Copper, the micropayments service Bottlepay, the hedge fund One River Digital.
In March 2022, Brevan Howard led a Series A round of $7.5 million for the DeFi platform Nested.
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