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crypto and digital assets expertise
tobam was founded 15 years ago with the desire to break free from traditional thought patterns, to think outside the box, to make diversification the core of the portfolio.
This state of mind of innovation is fuelled and largely based on Research.
The heart, the engine of our company is its research, there are 21 mathematicians and engineers involved in the research effort at tobam. We have a wide variety of profiles, around 16 different nationalities and some of our employees started to take an interest in Bitcoin a long time ago.
Young “gamers” and other “crypto” curious about our company began to think about the subject, to analyze the phenomenon, to understand how it works. Our credo is diversification, and Bitcoin is currently the pinnacle of diversifying assets.
In 2016, observing that Bitcoin’s liquidity seemed to improve significantly year after year, we decided to allocate permanent research resources to writing an investment thesis on Bitcoin.
This is how, in line with its quintessential commitment to diversification, tobam launched a separate crypto-asset activity in 2017.
cryptobam capabilities & strategies offering
The first step was indeed to build an investment thesis on Bitcoin, and study the fundamental and empirical characteristics of Bitcoin.
The proliferation of crypto assets and cryptocurrencies has prompted a lot of interest in the asset class. We consider at TOBAM that all crypto-assets are not equivalent or interchangeable and there are some strong differences. Bitcoin is for us, by far the crypto asset that is the best diversifier given the liquidity it provides.
Ethereum for example which is the second most popular crypto asset by capitalisation, has a market share or trading volumes that remain three times smaller than the one of Bitcoin.
Tobam’s mission is to serve institutional investors and as such looking at a crypto asset for investment purpose, required fundamental and operational characteristics to deliver diversification and capacity in a highly liquid form.
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 has the potential of becoming 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 probably take in the long-run in the mainstream financial system, it is also useful to keep in mind its libertarian root ethos. When Hayek wrote his famous essays on the “Denationalization of Money” he could of course not know what opportunities technology would once provide, however, regarded from today’s point of view, the crypto-asset ecosystem makes Hayek’s thought experiment of a competitive system of privately issued currencies rather than government monopolies become reality.
Bitcoin has in fact been conceived to address certain perceived shortcomings of traditional ‘fiat’ currencies, which could make it a hedge for its bearer.
In the era of Quantitative Easing and ever easing central bank policies, Bitcoin could be considered a compelling alternative to traditional stores of value and means of exchange.
Apart from its more fundamental investment case, Bitcoin is an extremely potent portfolio diversifier; its correlation to all the traditional financial assets that you may usually find in an investor’s portfolio is non-significant.
Bitcoin: a very very volatile asset
It is important to acknowledge the volatility of Bitcoin, which is indeed approximately an order of magnitude (10x) greater than for many other usual 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.
2021
Nov.
Launch of the first while-labelled fund with direct multi-crypto exposure.
2021
Sep.
Launch of next generation BTC fund eligible to FR unit-linked.
2021
Apr.
First DeFi mandate + Bitcoin-related equity bucket in AB Multi Asset.
2021
Jan.
Externalized research on DeFi.
2018
Sep.
Zero carbon mine inaugurated.
2017
Nov.
Launch of the first bitcoin open-ended fund in the world.
2017
Sep.
First bitcoin mandate.
2017
Mar.
Team hiring finalized.
2016
Mar.
Launch of the "crypto research project".
2013
Mar.
First bitcoin investment by TOBAM employee.
