Investment management firm DARMA Capital is going long on Ethereum.
Formed in 2017, the company manages $100 million worth of digital assets under its Ether Optimized Long fund for accredited investors and institutional clients. They are a CFTC regulated firm, with National Futures Association membership.
Having headhunted ConsenSys co-founder Andrew Keys, the firm is set to make a big splash in the world of investing. And their expansion is a significant indicator that institutional money wants to enter the space.
June 06, 2019 NEW YORK–(BUSINESS WIRE)–Andrew Keys joins Digital Asset Risk Management Advisors (DARMA Capital) as Managing Partner. DARMA Capital currently manages over $100M of digital assets since its public soft launch in early 2019. https://t.co/6IkQbedt4H
— HY Hyutte (@HyHyutte) June 7, 2019
Investment Firm DARMA Capital Plugging A Gap In The Market
DARMA Capital’s bullish take on Ether is welcome news for the entire industry. More so, the appointment of Andrew Keys, whose experience of developing infrastructure using the Ethereum platform, represents a real coup for the firm.
Speaking to BusinessWire, Keys outlined a vision that combines digital asset technology within a regulated environment.
“Our mission of providing Quantitative Systematic Alpha Generation of Web3 protocols will help corporations and institutions effectively manage risk in the nascent and volatile blockchain ecosystem. By registering with CFTC and having world class vendors such as Greenberg Traurig as our legal counsel. And Opus as our fund administrator, we plan to be the gold-standard of institutional investment.”
However, Keys will retain some involvement with ConsenSys, who have struggled as a result of the extended bear market. But, on speaking about his appointment at DARMA Capital, Keys talked about his desire to fill a gap in the market. In particular, the need to bring financial solutions to institutional investors. He said:
“My core competency has been in finance and my secondary competency has been in technology. There’s a void in the market, and this is a simple solution and I think a necessary missing piece of the market.”
Confidence In Ethereum
As an investment firm focused on managing blockchain risk, DHARMA Capital has set forth a thesis on investing in Ethereum. They have explicitly stated that their approach seeks only to deal with the most established digital assets.
To which, compliance with the highest standards of cryptocurrency regulation is possible.
As institutional investors need regulatory clarity, DHARMA Capital are confident that Ether will not present an issue. That is to say, they are confident that Ether is not subject to securities laws. To which they quote SEC Director, William Hinman’s speech at the Yahoo Finance All Markets Summit last year:
“based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.”
In addition, DHARMA Capital is further bullish on Ethereum as a result of rising demand from developers. They say:
“Developer adoption for Ethereum is steadily increasing and this directly impacts demand for ETH. All major cloud providers, including Amazon, Google and Microsoft, offer Ethereum as a service.”
Not only that, but the development of Ethereum’s blockchain capabilities is disrupting entire industries from advertising to telecoms. In short, DHARMA Capital believe Ethereum is poised for widespread adoption.
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