“I’m sorry, but there’s nothing more I can do to help you.”
Samara Asset Group (FRA: ECV) CEO Patrick Lowry had some choice words when it came to explaining just how much opportunity, and perhaps myopia, exists in the financial universe when it comes to Bitcoin.
In a recent Twitter Spaces, Lowry laid out his vision for a future financial system that utilizes the Bitcoin network at every level. From serving as a store of value à la “digital gold”, to being “the provenance of global financial commerce in trade, in money, and in capital markets”, opportunities abound.
Lowry believes that bitcoin may become “infinitely more valuable than anything Satoshi ever imagined and anything the Bitcoin community is thinking about.” Despite that, capital allocators, in his view, are somehow missing the boat, likening them to horses being led to water. For the Samara CEO, that’s all the better for those willing to take the plunge.
The MicroStrategy Copycats Are Coming
Having made a career in Bitcoin in digital assets, first at Deutsche Digital Assets followed by Cryptology (which went on to become Samara Asset Group), Lowry expressed a point of view that Bitcoin specifically is primed for a renaissance.
Primarily, he believes that MicroStrategy was just the first in a long line of copycats to come, and he likened his Malta-based Samara Asset Group as one such firm. “At [Samara], we have been acquiring as much bitcoin as humanly possible over the last couple of years.” For firms that want to follow suit, he believes recent fair value accounting rule changes by the FASB are more impactful than most in the market give them credit for, saying “I genuinely believe that the FASB’s ruling is more monumental, more forward for bitcoin, than the bitcoin ETF was.”
Joining the conversation, Dylan LeClair, Bitcoin Magazine Institutional Lead and Director of Bitcoin Strategy at Metaplanet (TYO: 3350), echoed a similar perspective. LeClair and Japan-based Metaplanet have broken ground as the first equity to serve as a bitcoin proxy in Japanese markets, offering investors a means of receiving bitcoin exposure despite what he described as an unfavorable legal and taxation environment for holding bitcoin itself.
LeClair believes Metaplanet and MicroStrategy will not be the only ones to employ a bitcoin strategy, but that those who are earliest will benefit most: “It’s the people and institutions at the fringe that have deep conviction that are the first movers. And I think that’s where the advantage is.”
LeClair praised companies like Jack Dorsey’s Block for their recent announcement in which they revealed plans to invest 10% of the company’s gross profits into bitcoin. Soon after, the Block CEO went on to predict a bitcoin price of “at least $1 million” by the end of the decade.
The Alpha Is Up For Grabs
For Lowry, it’s not just the fact that bitcoin may increase in value, but that many of the firms who were in position to capture that appreciation were absolutely decimated in the bear market of 2022 and 2023. “There was a complete washout of the marketplace. It might be higher than 90%, it might be 95% of crypto managers got wiped out.” In other words, the playing field is wide open thanks to the GBTC arbitrage fiasco that brought the crypto house of cards crashing down.
Samara Alpha Management, a United States-based subsidiary of Samara Asset Group, is working to fill that gap in the market through the Bitcoin Alpha Competition in partnership with Bitcoin Magazine Pro. As part of Pitch Day at Bitcoin 2024 in Nashville, the competition seeks to award $1 million in seed capital to emerging bitcoin fund managers while also giving them the infrastructure necessary to get their fund off the ground.
For the inaugural Bitcoin Alpha Competition in 2023, Animus Technologies Inc. was selected for their strategy leveraging artificial intelligence to analyze and capitalize upon changes in market sentiment. Animus CEO Maximilian Pace noted that the seed capital and Samara’s operational infrastructure enabled his firm to “focus on what we’re best at, which is signal formation and creating value through research.”
Lowry sees the globally distributed hivemind of talented digital asset traders, such as Animus, as a largely untapped resource. “You have some of the brightest and most talented managers in crypto that are just managing just a couple of assets via SMAs or frankly via Twitter. These are groups, and these are individuals, that I would like to empower by giving them the opportunity to have their own fund.
But these individuals don’t want to spend a quarter of a million or half a million dollars to become their own asset manager… These groups don’t know how to manage risk, they don’t know how to manage auditors. They might not even know what jurisdiction they should be setting up their general partnership or LP in… That’s [why] we started the Bitcoin Alpha Competition last year… [and now] we are very much looking forward to seeing what managers come from the competition for Bitcoin Nashville in July.”
Click HERE to apply for the 2024 Bitcoin Alpha Compeition as part of Pitch Day at Bitcoin 2024, Nashville
