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ByteTree Asset Management offers professional investors access to digital assets

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Buoyed by growing institutional appreciation of the potential of digital assets, ByteTree Asset Management has launched with the aim of offering professional investors means to access the asset class in a regulated manner, with the highest quality operational and legal structures. Founder and CIO, Charlie Morris, who spent 17 years at HSBC Global Asset Management as the Head of Absolute Return managing a multi-asset fund range overseeing USD3 billion, recognised that whilst there were many data sources for crypto currencies, few went beyond the provision of price and performance data. With little-to-no analysis, it was very difficult to determine price movements and hence position portfolios to capture the best opportunities. In 2014 Morris created ByteTree to address this gap in the market.

The team went on to access multiple blockchains and were able to deliver a range of statistics including coin counts, total output volume, hash rates and transactions numbers – data fields that are still widely used today across the asset class. In a bid to gain a higher-level understanding of the network by linking transactions together, the team built a first-of-its-kind terminal which collects, collates and indexes over 80 metrics for each blockchain network. It brings analytical discipline to the asset class with a greater understanding of price formation.

The ByteTree Asset Management team will look to leverage this proprietary real-time intelligence when they launch their first fund later this year. It will invest in Bitcoin alone and will be available only to professional investors.

The rise in popularity of Bitcoin has been astonishing in recent years with the market capitalisation standing at nearly USD250 billion today. Many investors are realising its benefits as a store of value and diversification asset.

Having been an investor in ByteTree since 2017 Charlie Erith joined the company in 2020 as CEO of ByteTree Asset Management. Previously, he spent 25 years in equity sales, hedge fund and long only fund management, starting his career at Cazenove, working initially in the Asian offices before becoming a Director for Institutional Sales in London. In 2006, he moved to Boyer Allan to co-manage a long/short Asia focused fund and in 2012 he co-founded Stone Drum Partners where he started a long-only fund with a focus on small and medium size companies, which subsequently moved to Asian boutique Coupland Cardiff in 2015.

ByteTree Asset Management CIO, Charlie Morris, says: “Institutional investor interest and appetite has grown enormously in digital assets and demand is unlikely to abate anytime soon. This is a major sea change in an asset class once dismissed by many as a ‘fad’. Investors are seeing its huge potential as a store of value and a credible diversifier, which will increasingly be sought in an environment of negative interest rates and slow economic growth. Many myths surrounding digital assets have been dispelled and the infrastructure is now of enterprise grade. As with any asset class, there will always be winners and losers so experience and analysis is everything. That is where ByteTree Asset Management has a distinct advantage by tapping in to our proprietary, first-to-market and unparalleled analysis engine, helping us to mitigate risk in real-time for more sophisticated and rigorous investors.”

CEO, Charlie Erith, adds: “It is abundantly clear that this is an industry becoming increasingly institutionally investable. Custody and liquidity provision are now of institutional quality, while regulatory structures, transparency and analysis continue to improve. It is little surprise that serious investors are starting to pay attention. The bubble is past, the criminal insinuations have been largely rooted out and usage and ownership numbers continue to grow. Bitcoin has been intensely road-tested and hugely de-risked. It has proved itself a survivor. Yet the philosophy behind it and its elegant construction remain intact. I see it having the properties both of a transactional currency and a store of value. In a world of negative interest rates, parlous balance sheets, slumping corporate profitability and unhinged equity valuations, it surely makes sense to have a toehold in a balanced portfolio.”

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