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GULFSTREAM INvesting in the future of digital assets

Gulfstream Capital, a registered investment advisory firm with a long history of allocating capital into alternative investments and other sophisticated portfolio diversifiers, is proud to announce its latest venture, Gulfstream Digital, an investment strategy designed to assist family offices, institutions, and individuals as they navigate the complex landscape of Bitcoin, cryptocurrencies, crypto tokens, and other innovative digital assets.

Bitcoin is the result of over forty years of research and development and demand. It was also the best performing asset class, by far, over the past decade (2011-2020). We believe that this trend will continue, as the world moves from the digitalization of money (bitcoin) to the digitalization of real estate, sports, art, gaming, social media, etc, through cryptocurrencies (i.e. ethereum), decentralized finance (DeFi) and non fungible tokens (NFTs).

Legendary billionaire and philanthropist Bill Miller believes that Bitcoin is still in the early hours of a long adoption cycle. In an interview at the Texas A&M Bitcoin Conference, the famed value investor said that Bitcoin solves centuries-old problems with the traditional money system. “The problem it solves is how do you safeguard a portion of your assets from the vagaries of the financial system and especially a system which is monopolized by governments...those monopolies have a way of behaving in ways that are in their own personal interest and not necessarily in the interest of the citizens.” The chairman of Miller Value Partners asserts that Bitcoin is “following the same adoption cycle that all the great technological innovations have had,” like the printing press, the steam engine, and railroads.

For more information on bitcoin, and why we believe it is not only a remarkable investment opportunity but also the catalyst for human flourishing and freedom, we are including below an interview with Michael Saylor (CEO of MicroStrategy) and Ross Stevens (CEO of NY Digital Investment Group). It is a very compelling argument for digital assets and, for those who are new to this space, we highly recommend taking time to listen to the conversation in it’s entirety.

Snorre Lorgen, CEO of Norway’s oil and gas major, Aker ASA, has recently established a new venture, Seetee, which will initially focus on 1) investing in and owning bitcoin, 2) joining the Bitcoin and broader blockchain community and establishing partnerships with leading players, 3) launching Bitcoin verification operations, and 4) building and investing in innovation projects and companies in the Bitcoin and blockchain ecosystem. The Seetee white paper (link below) to shareholders is a outstanding and an easy to read summary of how and why they are investing in this space.

Cathie Wood, founder of the ARK Innovation ETF (ARKK), articulates below the statistical case for adding a small percentage of an investment portfolio to digital assets (bitcoin) for diversification purposes.

Furthermore, you can see below the advantages of a adding a 4% bitcoin allocation to a traditional 60/40 stock/bond portfolio and the importance of professional management (rebalancing, dollar cost averaging, etc) to decrease volatility/drawdowns and increase Sharpe/Sortino ratios.

Ray Dalio correctly points out that the holy grail of investing is constructing a portfolio of good, noncorrelated assets. Legendary investors Paul Tudor Jones and Stanley Druckenmiller have been allocating to bitcoin because of the low correlation (diversification benefits) and other characteristics (asymmetrical upside) of digital assets.

Bitcoin was the first digital asset. But there are many other cryptocurrencies and crypto tokens which are building terrific businesses on top of the blockchain. We view them as outstanding investment opportunities.

Note: for more information on the difference between cryptocurrencies and crypto tokens click here (https://www.gemini.com/cryptopedia/cryptocurrencies-vs-tokens-difference) and for the universe of assets click here (https://coinmarketcap.com)

Does it make sense to own anything besides bitcoin?

The data and statistics say yes. Here’s a simplified example. Adding ethereum (ETH) in addition to bitcoin (BTC) provides even further diversification benefits for portfolios: lower correlations, increased returns, and higher sharpe ratios.

What is our thesis and investment strategy at Gulfstream Digital?

As Kyle Samani (Multicoin Capital) points out, crypto networks are making all units of value—stocks, bonds, real estate, currencies, and so forth—interoperable, digital, programmable, and composable on distributed ledgers, which is forcing capital markets to become more efficient and accessible to everyone on the planet. Just as the proliferation of capital markets over the last 100 years supported staggering levels of wealth creation, the permissionless, digital, expansionary effect of open/decentralized finance will pave the way for new services and applications that will deliver tremendous value for the benefit of human society.

In addition to open/decentralized finance, Gulfstream Digital is actively pursuing investment opportunities based on the vision of self-sovereign data (aka Web3). This vision empowers consumers to own their own data. This stands in stark contrast to the status quo, in which tech giants (Facebook, Google, etc), banks, and credit bureaus control consumers' data. As this paradigm shifts, incumbents will lose their primary competitive advantage—their data monopolies—unlocking a massive wave of innovation and value creation. When consumers own their own data, data monopolies will crumble. The second and third order effects of this will be profound, enabling the creation of incredible new businesses and services that are being built on the blockchain.

Gulfstream Digital provides institutions and high-net-worth individuals access to a diversified basket of publicly-traded digital assets. We manage a classically-structured strategy designed to achieve substantial risk-adjusted excess returns (i.e., alpha) over traditional public market investing in equities. Gulfstream runs a fundamental, long only, predominantly discretionary strategy, using qualitative research and decision making backed by the expertise of our team. We target our long term investments toward the most disruptive, scalable and promising blockchain applications and protocols. Gulfstream’s portfolio consists of projects across multIple financial and commercial use cases, with a focus on sports/gaming, consumer facing technologies, art/media, decentralized finance, and the pursuit of human flourishing/freedom.

Ethereum and Bitcoin (highlighted below) are just the tip of the iceberg. See performance (year to date) of the top 50 cryptocurrencies and DeFi coins through the end of March. At Gulfstream Digital, we believe that adding a mix of the best digital assets (decentralized finance tokens and cryptocurrencies) to a portfolio adds value beyond just owning bitcoin or ethereum.

Data through May 4, 2021 (source: AltFins)

The problem we are trying to solve?

Most people don’t know how to access this new asset class, they have lost keys to their digital wallets, or they are looking for wise counsel to help them navigate this highly complex space as a part of their portfolio. Consequently, we have created an investment strategy for family offices, institutions and individuals, allocating a small percentage of their capital to a diverse mix of digital assets. We manage these assets in client accounts (SMAs) at Gemini, the safest, most regulated, and highly insured custodian in the United States.

The advantage to our approach (unlike hedge funds, index funds, or ETFs) is total transparency, no K1s, and (most importantly) direct ownership of the digital assets by each individual client. Our edge comes from the intellectual capital and investment experience on our team (see below for bios).

Also, many have asked us about the risk of governments around the world who may try to outlaw or ban cryptocurrencies. The short answer is that it has already been tried, and it will never work. Horizon Kinetics put together a very thoughtful discussion on this topic (link below).

For more information on how to invest with Gulfstream, including fee schedules, account opening process, compliance disclosures, and investment strategy, please email us at info@gulfstreamdigital.io

Andrew Huck is the founder and chief investment officer of Gulfstream Capital. He has been investing in digital assets since 2013 when he was asked to do a media interview on the police chief of Hazard Kentucky who was demanding that his salary be paid in bitcoin. Since then, Mr. Huck has been traveling to New York and San Francisco on a regular basis to investigate the benefits of cryptocurrencies for institutional investment portfolios. Because he has been investing through two significant crypto bear markets (2014 and 2018), Mr. Huck has a long term understanding of the asset class. Mr. Huck is a 1996 Phi Beta Kappa graduate of Wake Forest University and did his postgrad work at The Darden School of Business at The University of Virginia (MBA). Mr. Huck has served on the boards of Young Life, FCA, and the Fellows Program, and is the co-founder of Telemachus, a national mentoring initiative. He resides in Knoxville with his wife and four children and is an avid golfer, skier, and racquet sports enthusiast.

Katie Skurski brings over nineteen years of investment and financial analysis experience to the team including positions with investment firms Fayez Sarofim & Company ($30B AUM) and Moneyzen Wealth Management ($50M AUM), and with Fortune 500 Corporations including Nike and Ruby Tuesday. She graduated Magna Cum Laude and as a member of the Phi Beta Kappa society from Vanderbilt University (B.A. 1999) where she majored in Economics and double minored in Mathematics and Business Administration. Skurski also holds a Master of Business Administration from Duke University’s Fuqua School of Business (2004) where she focused on financial and investment analysis. Skurski holds the Chartered Financial Analyst (CFA) designation and is an active member of the CFA Society of North Carolina where she resides with her family in Chapel Hill.

As one of the leading security and applied cryptographic experts in the country, Dr. Nathanael Paul helps determine the viability/scalability of cryptocurrencies, tokens, and blockchain investments for Gulfstream Digital. Dr. Paul previously served as the chief scientist and founder of the Oak Ridge National Laboratory’s Center for Trustworthy Embedded systems. In this role, he served as the Center’s primary security technical lead for multiple sponsors including the DOE, DOT, NSF, IARPA, ORNL, and other government agencies. His work was used to secure our nation’s infrastructure including the areas of energy, transportation, and healthcare. Today, Dr. Paul also leads product security for a S&P 500 private sector company, and he also holds a dual role as an Adjunct Associate Professor of Electrical Engineering and Computer Science at the University of Tennessee. Prior to joining the Gulfstream Digital Board, Dr. Paul was a research scientist at the VU University in Amsterdam. He previously received his Ph.D. in Computer Science from the University of Virginia. In his early life, Dr. Paul first started programming at age 10, and he started working with cryptographic ciphers at the age of 11. Dr. Paul splits his time between Knoxville and San Diego, California.

Mr. Raleigh McCammon runs marketing and business development for Gulfstream Digital. He is a graduate of the University of Tennessee, Knoxville (B.A. 2013) where he concentrated in sport management and business. Prior to joining Gulfstream, Raleigh worked in sports and community development in multiple sports including basketball, baseball and tennis. With his relationships in the NFL, NCAA, MLB, NBA, ATP/WTA and PGA Tour, Raleigh has been a tremendous asset for Gulfstream Sports. Outside of the office, Raleigh enjoys coaching youth baseball and basketball travel teams, playing tennis, and ShakeShack.

J.R. Becko serves on the advisory board for Gulfstream Digital. Mr. Becko was an early investor in both Bitcoin and Tesla, and has been on the cutting edge of disruptive technologies for most of his career. He has a broad background across multiple high tech industries and has extensive experience building highly productive commercial teams with both startups and large corporations. His specialties include venture capital investments in digital assets, social networking, wireless telecommunications, innovation, and advising entrepreneurs. Mr. Becko attended the University of California, Santa Barbara, where he starred on the college golf team. J.R. serves on the board for multiple philanthropic endeavors, including College Golf Fellowship. He lives with his family in the San Francisco Bay Area.

Disclosure. This website is for informational purposes only and should not be misconstrued as investment, financial, or other advice. There are risks to investing in digital assets, cryptocurrencies, and crypto tokens. All individuals should consult their financial advisor to determine suitability. Loss of principal is possible. Past performance is no guarantee of future results. Digital assets are a representation of value that functions as a medium of exchange, a unit of account, or a store of value, but they do not have legal tender status. These assets are not backed nor supported by any government or central bank. Their price is completely derived by market forces of supply and demand, and they are more volatile than traditional currencies and financial assets. Investing in them comes with significant risks, including volatile market price swings or flash crashes, market manipulation, and cybersecurity risks. In addition, the crypto markets and exchanges are not regulated with the same controls or customer protections available in equity, option, futures, or foreign exchange investing.