crypto and digital assets expertise
TOBAM was founded with the desire to break free from traditional thought patterns, to think outside the box and make diversification core to any asset allocation.
Our state of mind is innovation fuelled and based on Research. Around a quarter of our employees are mathematicians and engineers involved in the research effort.
Some of our employees started to take an interest in Bitcoin a long time ago, in 2013.
In 2016, observing that Bitcoin’s liquidity seemed to improve significantly year after year, we decided to allocate permanent research resources to crypto and formed the” TOBAM Crypto Research Project”. The first job accomplished by the new group has been to write an investment thesis on Bitcoin based on its fundamental and empirical characteristics, this is how, in line with its quintessential commitment to diversification, TOBAM began its crypto-asset activity in 2017.
crypTOBAM capabilities & strategies offering
Bitcoin: a unique diversifier
TOBAM investment thesis on Bitcoin can be summed up as follows: the theoretical and empirical characteristics of Bitcoin are such that it could potentially become a new store of value, a ‘gold 2.0’ so to speak.
To understand the roots of Bitcoin or the crypto-asset ecosystem and what place it could take in the long-run in the mainstream financial system, it is useful to remember Hayek thesis developed in his famous book the “Denationalization of Money” : a thought experiment of a competitive system of privately issued currencies rather than government monopolies. His thesis being that if a group of people benefit from a monopoly on money issuance, a day or another they will abuse the monopoly, this abuse resulting systematically in disastrous crisis. In order to avoid the crisis, we need to get rid of the monopoly .
Bitcoin has in fact been conceived to address certain shortcomings of traditional ‘fiat’ currencies, making it a hedge for its bearer.
In the era of Quantitative Easing and ever easing central bank policies, Bitcoin is considered by some as a compelling potential alternative to traditional stores of value.
Apart from its more fundamental investment case, Bitcoin is an extremely potent portfolio diversifier; its correlation to all the traditional financial assets is, on the medium term, non-significant.
Bitcoin: a very very volatile asset
It is important to acknowledge that the volatility of Bitcoin in recent years has been indeed approximately 10x greater than other typical financial assets.
Risk, in itself, should however have no bearing on the investment thesis and on the decision to invest or not. Investing is not a binary yes/no decision, everything is a matter of how risk is sliced and diced in a portfolio of assets. For instance, keeping US$ 1000 million invested at 10% volatility is far riskier in USD terms than US$ 25 million at 80% volatility.
To state the obvious, Bitcoin needs to be properly scaled in order to become useful from a portfolio construction perspective.
tobam's journey into crypto
Launch of the first while-labelled fund with direct multi-crypto exposure.
Launch of next generation BTC fund eligible to FR unit-linked.
First DeFi mandate + Bitcoin-related equity bucket in AB Multi Asset.
Launch of the first bitcoin open-ended fund in the world.
First bitcoin mandate.
Team hiring finalized.
Launch of the "crypto research project".
First bitcoin investment by TOBAM employee.