Black Entrepreneurs Launch Crypto Fund In A World Where Bitcoin Happiness Has No Ceiling
Chris Russ is a private equity investor and former investment banking analyst at Credit Suisse. The fourth partner is Kyle Forkey, a former project manager for Pegasus Builders in Wellington, Florida, who now also runs a separate firm specializing in equity-oriented ICOs.
The new venture is raising funding from individual investors for its first fund and hopes to start putting the money to work at the beginning of 2018, according to Coindesk.
MarketWatch interviewed McKie about his early investments, and what it has been like to watch cryptocurrencies evolve from what some thought was a crazy idea — some still do — to the investment that everyone’s talking about.
McKie wouldn’t talk about his net worth or say how much money he has made from cryptocurrency. “I’ve definitely started from the bottom,” McKie said.
The Amentum team plans to invest about 70 percent of its new fund in liquid cryptocurrencies – a portfolio that will be actively managed – and reserve the other 30 percent to selectively deploy in initial coin offerings and public blockchain launches, Coindesk reported. The ICO investments will include discounted pre-sales, though not exclusively, McKie said:
“Amentum’s main investment criteria for a blockchain are sustainability (does a project have the use cases and committed developer community that will last?), interoperability (can it integrate with other projects to create additional value?) and security (is it safe to use?) According to McKie, it will charge investors the standard “two and twenty” management fee – 2 percent of assets under management plus 20 percent of the profits.”
Here’s an excerpt from McKie’s interview by MarketWatch.
From MarketWatch. Interview by Kari Paul.
MarketWatch: Why do you think bitcoin has taken off lately the way it has?
McKie: The reason we’ve been having this explosion is the NASDAQ bitcoin futures— which is basically Wall Street saying hey we are still relevant — you can tell people you made money on bitcoin even though you never touched it. They are fighting to maintain relevance but what is funny is the more you try to claim you have control over bitcoin the more you show you do not quite understand the theoretical mechanisms at play here.
MarketWatch: Could you talk more about your financial background and the role it played in your crypto career?
McKie: When I decided I needed to put myself through college, I was the first one to go in my family. My mom was jobless at the time, so I had to do her taxes, and apply for student loans to attend college. I was not able to get enough money in federal grants to be able to afford text books so I did all my classes without textbooks and tried to learn the best I could. It was very hard — you do a lot of unsavory things when you are trying to survive.
When I discovered bitcoin I felt I had become a part of something that was going to be huge, and since I had a very poor background and poor family, bitcoin and the crypto community kind of became my family.
MarketWatch: What do you think of people who look at those who got rich off of bitcoin as lucky?
McKie: (My success) did not come as an accident, I worked my ass off. There were periods of time in college where I only ate Muscle Milk protein and Clif bars and every bit of cash I had went into crypto. Any time I could I would skip meals and be back on my computer trying to invest and dig myself out of this hole. I knew with the right amount of input I could get something out of it. I didn’t know what the timeline would be — all I knew is once I started working on it I couldn’t stop.
MarketWatch: Can you say how much you’ve made in crypto?
McKie: All I will say is that I’ve eradicated all my debt and now I have the flexibility to start a hedge fund. Everything else I just tell the IRS, and that is the only person who needs to know.
I know personally many people who will become billionaires by next year. There have been a lot of multimillionaires who have been created in the past year. I can say the network I am in is now very wealthy.
MarketWatch: Are these potential billionaires you know actually billionaires or are they just holding that in bitcoin?
McKie: A little of both. There are those that just held egregious sums of bitcoin — every year for the past 5 years they have been accumulating all these assets and holding on to those funds in crypto because they don’t want to pay capital-gains tax.
And then there are those who have sold a lot off out to fiat (exchanged the bitcoin for dollars) and paid taxes on it. There are some who have made enough post tax where it makes sense to sell it, but there are others who want to wait until there is more clarity on taxes so they have more money post tax.
MarketWatch: What is the biggest risk to bitcoin right now?
McKie: The biggest risk to bitcoin is the exchanges and services that are acting as liquidity providers and on-ramps like Coinbase — as they take custody of larger and larger amounts of funds and as bitcoin continues to grow in value, there is huge counterparty risks when it comes to these exchanges (risks that the exchange will not come through with the funds it is holding). I could see some exchange being held hostage. But as the space matures we will get more tools (to reduce this risk).
MarketWatch: What do you think is the highest value bitcoin will go to?
McKie: Technically there is no ceiling on bitcoin price potential. It’s a standard supply and demand market. Crypto as a whole is basically a siphon for fiat wealth, and as the value grows, the incentive to put your money in crypto continues to grow.
So from a price standpoint, bitcoin has no ceiling — it’s infinite. When people ask about price target, we say “to the moon” — and nobody knows what that means. When bitcoin hit 10,000 I thought “Is this the moon?” but as the price goes up, we get happier. There is also no ceiling on happiness and we will see that continue to grow.
Read more at MarketWatch.
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