Depending on whether you are a qualified investor or a simple saver, you can invest in a pure bitcoin fund or in a fund in the bitcoin economy. Explanations from Yves Choueifaty, founder of Tobam, the asset management company that issued these two funds.
After the launch of Tobam Bitcoin CO2 Offset fund in 2016, the Tobam BTC-Linked and Blockchain Equity fund will be the first investment fund in the blockchain economy and Bitcoin, open to all subscribers in France and soon eligible for the ‘life insurance.
A diversification investment supports its creator Yves Choueifaty founder of the independent asset management company Tobam
Until now in France, an individual could acquire bitcoins by mining, provided they were an expert, or by buying them from a platform like Coinhouse. When did you decide to open a third way with an investment fund?
In 2016, at TOBAM we wrote an investment thesis which we presented to the AMF (financial market authority), which then authorized us to launch the 1is November 2017 the first open FPS fund Tobam Bitcoin CO2 Offset Fund. It is an FPS, that is to say a specialized professional fund reserved for qualified investors.
It is 100% invested in bitcoins. This fund remained the only open-ended fund invested in bitcoins in the world until it was emulated this year by a Canadian company. There are now three funds similar to ours in Canada, and a fourth in the United States. Obviously with a few nuances.
A fund for the general public
And it was only four years later, on October 22, 2021, that you launched a fund aimed at the general public Tobam BTC-Linked and blockchain equity, a fund that can hold up to 10% of Tobam Bitcoin Fund, i.e. 10% of bitcoins, why this limit?
It is regulatory, to enter the category of general purpose investment funds (FIVG) after the Pacte law. This new fund can hold up to 10% of our FPS (which itself holds 100% of its assets in bitcoin). This fund can therefore be offered to individuals in France.
What is the rest of the assets invested in?
The rest of the assets are invested in around forty companies in the Blockchain economy, such as the Coinbase trading platform, the company Microstrategy, which is heavily invested in bitcoins, the mining company Bitfarms, the broker Galaxy Digital, etc.
What are the advantages of investing in funds?
Tobam BTC is a real open fund. A fund is arguably the most tested way to own any asset. It has an extremely powerful mechanism: the separation of tasks between the management company, the custodian, the administrator who calculates the net asset value and the auditor. None of them can perform an operation without the knowledge of the others.
Many bitcoin owners have lost their private key or had their wallets hacked in a breach of the platform that held their key! How do you insure your investors’ bitcoins?
The bitcoins held by the fund are not left on the platforms, but transferred to “cold wallets” (“cold wallets” because they are not connected to the internet) via BitGo, one of the largest and first custodians on the market in terms of relates to crypto-assets.
Is there a security deposit on the value of bitcoins, insurance or other guarantee?
There have been very large fluctuations in the price of bitcoin. Do you see correlations with other assets?
Investing in bitcoins is very very risky, it is better to be supported by a professional.
But it is poorly correlated. From time to time developments coincide but I do not believe that we can significantly link the price of bitcoin to gold, to technology stocks or to anything else… hence its ability to diversify.
Two funds invested in the Bitcoin economy and bitcoin
Tobam Bitcoin CO2 Offset Fund (FR0013293859): reserved for professionals or clients with a mandate account. Outstanding: 20 million euros
Tobam BTC-Linked and Blockchain Equity (FR0014002IN6): all subscribers. Outstanding: 1 million euros. The fund is not yet referenced by all platforms or brokers.