Episode: In 2010, Matt Kolesky’s interest in Bitcoin led him to join an online mining pool. Not long after, he was buying bitcoin at Mt. Gox. Today, as President at Arbor Capital and Director of Arbor Digital, Matt helped create our industry’s first true digital asset SMA.
Insight: A year or two ago, many of your clients might have thought you were crazy if you suggested adding digital assets to their portfolios. Today, if you’re not at least investigating Bitcoin’s potential as an investible store of value, you run the risk of falling behind the curve.
3 Quotes from Matt Kolesky:
The feedback from clients initially was kind of like, “Okay …” But, as an advisor, you develop that trust over time. Which is really, really important. We take our fiduciary obligations and that trust that comes with that very seriously. After doing all of our due diligence on Bitcoin and why it made sense to have a small allocation in an alternative portfolio for folks, most people were like, “Yeah, that makes a lot of sense.”
Bitcoin’s use cases continue to evolve. Ethereum’s use cases continue to evolve as well. And so when I think about what that means from a portfolio perspective, we want to have exposure to Bitcoin. We want to have exposure to Ethereum, but what Ethereum is enabling is an entire new infrastructure to be built on top of it with ERC-20 tokens. And the defi space is really just being built on top of the Ethereum network. And so we want to have exposure to some of these decentralized financial tokens.
Bitcoin is just one asset. This is technology that is going to evolve really rapidly. And we’ve seen this in the traditional world with how the tech sector has just overtaken everything. Technology is eating everything. Software’s eating everything. And so this is just a natural extension of that. And when you look at the efficiencies that this can bring to — I’ll say it — to an antiquated financial system, it’s really compelling. And having exposure to these assets is really what’s driving this.