Institutional investors and high-net-worth individuals (HNWIs) tend to be risk adverse; they seek stable, long-term returns over volatility and a risky quick buck. Coupled with ongoing concerns over cryptocurrencies (arguably over-exaggerated) connections to crime and the dark web, and a lack of regulation, many have understandably steered clear.
Yet, at the same time, having seen the profits it can generate, increasing numbers of HNWis are keen to explore the potential of this new form of currency. Yet the hurdles of volatility, cultural differences between crypto and traditional investment, and a lack of awareness of how to take the first steps in the crypto markets, continue to hold them back.
To appeal to HNWIs, any cryptocurrency (and there are now more than 1,300 of them) must therefore offer stability, transparency, legitimacy and familiarity. And, despite widespread perceptions, these principles needn’t be at odds with that of crypto.
This was the rationale behind BOND, a new cryptocurrency specifically targeted at HNWIs. The model of BOND is designed to be very familiar to institutional investors; they are essentially afforded the opportunity to buy shares in an asset portfolio, underpinned by property bonds and real estate.
As the value of the underlying asset portfolio increases, so does the value of the shares. The shares — known as BOND units — are 100 percent asset-backed and can then be bought, sold and exchanged on a digital stock exchange (think of it like a digital NASDAQ or FTSE), making them a cryptocurrency in their own right. At launch, one BOND unit was $1. Today, each BOND unit is $1.3 – a 30% increase in value.
Our mission is to introduce the traditional concept of buying, selling and trading shares within the cryptocurrency world. By offering a well-known investment model, we aim to make it easy for HNWI investors to take their first steps in cryptocurrency in a reassuring, transparent way.
This isn’t about getting rich quick. The platform looks to provide long-term, responsible returns (projected at a minimum of 8 percent), and to bridge the gap between the traditional and the new. It’s also built upon transparency; unlike the vast majority of unstable cryptocurrencies, every investor must both be institutional (with an income of at least US$200,000 for the past two years, or a value of at least US$1 million), and pass identity and due-diligence checks. Those looking to invest have to identify themselves through KYC (know your customer/due diligence) checks; almost every other cryptocurrency can be purchased and traded anonymously, which is where fraud and criminality can seep in.
An obvious question might be: why not just stick to the wide range of traditional investment options that offer a similar rate of return? In essence, BOND is a traditional investment option — in terms of its structure, philosophy, and projected generation of returns — but it enables you to branch out into the cryptocurrency sphere without the extreme volatility associated with many of the household crypto names.
Once you are in possession of BOND units, they — as a cryptocurrency in their own right — can be used to purchase an increasingly wide range of conventional luxury assets. Today, anything from supercars and yachts to rare jewels and fine art can be purchased in a wide range of cryptocurrencies. Dadiani Fine Art in Mayfair recently became the first London art gallery to accept cryptocurrency as payment for its artworks, while a £17m mansion in London was listed last year, only accepting offers in Bitcoin. New York startup The White Company calls itself the “purveyors of luxury to the cryptocurrency world”, accepting Bitcoin for a variety of luxury items from Rolexes to Lamborghinis.
Essentially, cryptocurrency assets can offer plenty in the ‘real’ world, as opposed to just sitting in a digital wallet.
The mechanics, politics and indeed entire concept of cryptocurrency may currently seem alien and initially unappealing to many traditional HNWIs and investors. But with a greater emphasis on establishing legitimacy, lowering risk and building trust, a new relationship between crypto and professional investors can be born. Doing so will require adaptation in mentality from both ends, but it can be achieved.
This article was originally published on https://www.billionaire.com.