How First Growth Global mines the $375bn crypto space for investing opportunities
Special report: The global market cap for cryptocurrencies is sitting at around $375 billion and with plenty of scope for growth right across the crypto space, First Growth Funds is looking to cash in.
First Growth’s (ASX:FGF) share price surged as much as 40 per cent in one day last December when it announced the appointment of blockchain expert Anoosh Manzoori.
Blockchain is a technology used to secure online transactions. It’s best known as the basis of cryptocurrencies such as bitcoin but is increasingly used in other ways such as verifying supply chain data and securing digital contracts.
Widespread interest in blockchain and cryptocurrencies is one thing, but First Growth has outlined a rigorous approach to finding the best crypto opportunities.
The company invests in a mix of equities as well as taking stakes in blockchain opportunities and Initial Coin Offerings. An ICO is like an initial public offering — but instead of offering shares, an issuer offers digital tokens that can be traded on cryptocurrency platforms or swapped for services.
First Growth looks to invest in new crypto tokens at a discount by acquiring tokens at a low valuation but buying these up at a large stake before that token lists on crypto exchanges.
This strategy involves buying tokens at a 25 to 75 per cent discount when a sale for a new token begins. The fund then aims to sell the tokens as soon as practical after listing — meaning that as long as the currency trades above its listing price, the fund can make a profit.
First Growth has recently taken stakes in three new digital currencies, bringing its digital currency investment portfolio to eight.
Its portfolio includes a $250,000 stake in health startup Lympo, which monetises data from health and fitness apps by rewarding users with tokens for sharing their information.
First Growth has also bought $200,000 worth of big data start-up Human Protocol’s token, as well investing $200,000 in digital marketing public chain project Proton.
Global blockchain equity stakes
First Growth has also taken strategic equity stakes in blockchain-focused businesses and updated investors in June that more digital currency, equity and small and large cap investments are in the pipeline for 2018.
When it comes to crypto-focused equity stakes, the fund is interested in real-world blockchain applications as well as solutions for keeping cryptocurrency itself secure.
One company in the portfolio is smart lighting startup Cloud Lumen.
Meanwhile, the fund also bought 15.5 per cent of total tokens for the CryptoData Vault project, as well as taking an equity stake.
The startup is focusing on a key challenge of the cryptospace – security of tokens. Its “geo-fencing” hardware wallet for currency storage is progressing in development.
This special report is brought to you by First Growth Fund.
This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice.
If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a disclosure document, a Product Disclosure Statement or an offer document (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.