Bitcoinist spoke to David Drake, Chairman of LDJ Capital, a $200 million dollar cryptocurrency fund, about the current price downtrend, what determines ICO quality, and the potential impact of regulations in key countries across the globe.
David Drake is the Chairman of LDJ Capital, who has also been involved in TMT (technology, media, telecoms), realty, hospitality, clean tech, energy, and social impact investments for more than 20 years.
Drake is an advocate of innovative investing in early-stage equity, capital formation policies and developments globally, and the US JOBS Act which he lobbied for in the US Congress and the EU Commission.
Because of his leading work in this space, he represented the US Commerce Department at the EU Commission in Brussels and Rome in 2012 and was invited to the White House Champions of Change ceremony in Washington, D.C. and as a speaker at the UK Parliament in 2013.
Bitcoinist: What is LDJ Capital? How much capital do you currently manage?
David Drake (DD): LDJ Cayman Fund Ltd is a $200M cryptocurrency fund across the whole Capital stack.
I am also a board advisor for several Initial Token Offerings. Top 15 ICOs I advise raised $500,000,000 in the last 6 months. Fortunately, I have 25 employees managing daily interactions with the 20 ICOs I help.
I certainly feel like a Lucky Golden Token.
LDJ Capital is a financially integrated family office with a global footprint and local presence in 12 countries. We raise interest from our family office resources and from our LDJ Capital team members, who include the likes of a former chairman of Nasdaq and CEO of Intel Capital. We are taking on a few more ICOs on a road trip in the next few months.
Bitcoinist: Is your fund involved in cryptocurrency trading?
DD: Yes, we’re involved in investing in crypto trading, as well as long-term investments but I’d say 80% of our trading you buy and hold as we are long-term players and looking in on the line of strong fundamentals.
After having underwritten and worked with 250 different funds we have finally learned how to understand and underwrite the best of the best. I made it 12 xx on quantstamp making millions.
Bitcoinist: What is your experience with Bitcoin/cryptocurrencies?
DD: My job is best performed as a global strategist and board advisor. In parallel 150 family offices, crypto traders and hedge funds globally rely on my opinion. Thus, I need your ICO quality to be institutional-grade.
Bitcoinist: What determines whether an ICO is “institutional-grade”?
DD: Equity capacity, revenue, existing business history, leadership, composition, regulatory framework, brand recognition.
Bitcoinist: What are your thoughts on crypto in 2018 so far? Typical January price correction across the board or something more serious?
DD: I think we will have Regulators stirring up the marketplace several times a week for the next two months until the SEC comes out with a direction and institutions are starting to invest.
At that point, prices will go off and I think that’s going to happen around March and April.
Bitcoinist: What kind of impact will Facebook no longer allowing crypto ads have on the industry? Is this a good thing (e.g. no more BitConnect ads) or will it have a negative impact?
DD: I think the industrial address will slow down the growth and the hype of the business, and that’s a good thing.
Bitcoinist: How about China banning ICO’s and clamping down on its mining industry? Is this the end of China being a dominant player in crypto?
DD: The Chinese moved their business to Japan, Korea, Hong Kong and Shanghai. Chinese exporters are getting paid in foreign fiat so they’re still very big exporters of capitals as they export their product.
This is not the end of their play in the industry but they’re certainly not going to be a top three player at the end 2018.
Bitcoinist: Regulations are also looming in major crypto markets like South Korea and India, for example. What kind of regulatory approach should nations follow? The hardline Chinese or the accommodating Japanese model, for example?
DD: Absolutely Japanese, and that’s exactly what they will be doing by guiding, how to deal with cryptocurrencies and initial coin offerings.
Bitcoinist: Bitcoin price has dropped over 50% since December, but most altcoins have dropped even more. Is diversifying in altcoins pointless? Should traders simply sit out in fiat during these types of downtrends?
DD: Traders certainly are cashing out and they’re sitting and waiting for the correction; and, we see this happening every 2 to 3 weeks constantly.
They are making money on our fear.
Bitcoinist: Besides Bitcoin, what cryptocurrencies would you recommend to your clients?
DD: The contenders against Ether such as EOS and Stellar. They are upcoming contenders for the top three spots and I am very eager to see how quickly they will grow and today its half-price Friday.
Bitcoinist: Where do you see the crypto industry in 2-5 years? Is crypto here to stay? Will traditional traders keep flocking to crypto?
DD: It’s here to stay and it’s a permanent force that’s going to be a 10 trillion dollar market.
Bitcoinist: So what can investors do in the meantime?
DD: It’s half-price, so go shopping.
Will cryptocurrency funds soon be the new hedge funds? Let us know below!
Images courtesy of Shutterstock, LDJ Capital