We created Abacus Carbono as our contribution to mainstream crypto onboarding. Keeping up with projects, separating grain from the stalk, coping with volatility, dealing with FOMO... that is a full-time job. So many people around us showed interest in crypto but didn't have the time for all the work that picking, purchasing, and holding crypto assets involves.
Some of you might be familiar with the genesis story of Abacus Carbono. It took three years to overcome the regulatory and infrastructural hurdles, including months being delayed by global lockdowns, before we could finally launch.
Now get ready for a colossal cliché:
Things have changed a lot in a year.
They have. We all know this. But how have things changed from the perspective of asset management? The funny thing is that while some things have become much more straightforward, some others are getting increasingly complex.
Some things are simpler now...
Launching a fund would have been much easier now. The world now understands crypto much better, even in those places where they disapprove of it. Regulation is immature and will probably evolve quickly, but in 2021 we can say that it's primarily clear: jurisdictions know what they want and what they don't.
Investors are easier to find. Abacus Carbono's initial customers were trailblazers or lunatics, depending on who you asked. Many of them were already sure they were in this for the long run; many had already tried investing themselves but preferred to delegate it to professionals. To this day, our investors are interested in the space beyond just returns. They are informed and want to be up-to-date on trends and opportunities. As the crypto industry evolves, investors will likely become less interested and more passive.
The ecosystem of companies has blossomed enormously in a year. And, in particular, those who are offering professionalized services. The user experience and scope of the offer from exchanges, custodians, insurance companies, and other intermediaries have evolved positively.
Institutional investors can finally invest in crypto assets. Until recently, it was challenging for institutional investors to have crypto exposure. But this has changed lately: now they have access to regulated and insured custody solutions and trading platforms. And every country in the world is clear about they see crypto assets from the regulatory side.
...but some are more complicated
And, about the scope of the offer: this is where things have got more complex and more exciting. Abacus Carbono only invests in a list of approved assets, according to the regulation. The investment team can add assets to that list through a thorough approval process where an investment committee integrated by risk and investment experts has to validate every proposal.
Criteria for the inclusion of a new cryptocurrency include:
- Liquidity. They must be available in sizeable volumes in already approved and regulated exchanges (in our case, Kraken and FTX).
- Technical and economic relevance. Projects’ value proposition must fit identified relevant trends, and have a clear path for its cryptocurrency to accrue part of the value generated by the project.
- Reputation. Team and project history, security criteria, and code analysis are involved in the process.
The variety of projects that could potentially be approved here is constantly increasing, and so is the speed at which new trends, new investment opportunities, come up. Some of them are off-limits (for example, Abacus Carbono can't invest in NFTs because of their lack of immediate liquidity). Still, DeFi, staking, and lending solutions are on our radar. And with the Cambrian explosion currently happening in different ecosystems like Solana, Avalanche, Terra, Polkadot, the number of projects we analyze is exponentially growing.
We've made our share of mistakes along the way. Most of them missing out on opportunities that could have reaped tremendous benefits. But we are proud to say that Abacus Carbono has consistently outperformed holding. Time proved that we had been right at being patient at some times and good at reacting quickly in others.
These first twelve months of life have been gone by at an incredible speed, both for us and the whole ecosystem. And it doesn't look like it will slow down any time soon. Crypto seems to live in dog years: every year that goes by feels like seven years in traditional finance. We cannot wait to see what the next 12 months bring us.
By the way, we just published a new web for Abacus Carbono. Check it out.