Contributed by: Show Editorial Team
– CoinShares is digital asset company with $250 million dollars under management
– Goal to create regulated, safe, stable products for retail consumption
– Allowing retail & institutional investors to invest in blockchain without holding the asset
INTERVIEW TRANSCRIPTS: Meltem Demirors, CSO of CoinShares interview with Matt Bird
Matt Bird (Show Host, Traders Network Show):00:00
Welcome back to the Traders Network Show. We’re broadcasting worldwide on Equities.com I’m your host, Matt Bird. We’re in Davos, Switzerland covering the 2019 World Economic Forum. And my next guest is Meltem Demirors. She’s a chief strategy officer for CoinShares, digital asset management from a $250 million under management. Welcome Meltem.
Meltem Demirors (CSO, CoinShares): 00:20
Thanks for having me. How are you?
Matt Bird (Show Host, Traders Network Show): 00:22
I’m doing great. We’re at halfway through Davos and it’s starting to feel that little bit that way that I don’t know if you’ve had a chance to go by any of the social gatherings, but a they’re pretty amazing. But listen, this is about you and this is about what you guys are doing at CoinShares. Tell us a little bit about the firm and what you guys are doing and where you’ve evolved. Cause while I understand you guys have really done some amazing growth initiatives the last couple of years, just tell something about that.
Meltem Demirors (CSO, CoinShares):00:48
Sure. So point shares at its core, we’re a digital asset manager. What we’re focused on is creating products for retail and institutional investors across the world to allow them to get exposure to crypto assets and the blockchain sector broadly. Whatever that means, we can delve into that. We really started our story with very simple concept. How do people get exposure to Bitcoin if they don’t want to deal with custody of themselves and they really don’t want to deal with some of the operational security aspects that go into buying Bitcoin. So our first product was a Bitcoin exchange trade note.
Matt Bird (Show Host, Traders Network Show):01:21
Okay. So, so they basically got you very much like a ETF or, or a like a mutual fund or an ETF.
Meltem Demirors (CSO, CoinShares): 01:29
Absolutely. So really the idea is we wanted to create these, we want to be an ETF. The problem is right now, so when you buy a bar of gold, right, you have a right to something physical. I think one of the challenges for regulators in particular is when you buy Bitcoin, you have the rights to a digital good. And I think that’s very different. And so the idea of redemption and an ETF scenarios are challenging, particularly with what Bitcoin has gone through in the last few years with chain splits and forks. It’s is challenging
Matt Bird (Show Host, Traders Network Show):01:56
Now you’re, you’re at your asset, they rested products. Are you doing all the vetting your, are you putting, are you putting a number of assets together and then you’re managing the fund?
Meltem Demirors (CSO, CoinShares):02:04
So right now, we have to, you’re right. So we have two focus areas. So, on the retail side, we’re just doing single asset the reason they’re ETN we fully collateralized with the underlying, so our notes are created and redeemed on a daily basis. And the great part about that structure is people can get in and people can get out. And actually what we’ve seen is the level of creation of new shares in our product is a great bellwether barometer for the sentiment investors have around the point. And it’s ethereum. Now Bitcoin in a theory and we’re hoping to add more single point together.
Matt Bird (Show Host, Traders Network Show):02:35
Are there any other stable digital assets out there? I mean there’s tons of digital assets, but are any of them, is there any other stables? Is there a third?
Meltem Demirors (CSO, CoinShares):02:45
Yeah. So look there. What we look at is liquidity. So are we able to create and redeem shares for our investors at a reasonable market price though if 10% of our shares get redeemed, we don’t want to crash the market price, right? We don’t want to have a lot of slippage. So number one is look for a lot of liquidity in the assets. So, if we look at right now as if by market cap, we have the bitcoin number one bitcoin number two, number three, and then you have like point Fios, a handful of others. Sorry, I just want to finish all that. So we have the retail side. Then we also have an institutional side to our business or we create private strategies, almost like private hedge funds that provide strategies, right? So we have a passive fund. We have more actively managed funds. We’re looking at different index construction.
Matt Bird (Show Host, Traders Network Show):03:27
Hey, listen, I actually want to keep you, I’m going to keep you but we have the cut to a commercial break. You might be sticking around for part two. You’re watching a Traders Network, I’m Matt Bird your host broadcasting on Equities.com. We’ll be right back.
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