Introduction
Digital Asset Management Limited celebrates its first year since incorporation on the 11th December 2017.
The Company”s first year has been extremely productive with a number of milestones reached and momentum building into its second year of operations, development and growth as a Distributed Ledger Technology business.
The Company has on-boarded a number and variety of great Clients ranging from top Coincap cryptocurrencies and protocols, investment funds, high net-worth individuals and ordinary businesses and firms starting to operate with digital assets. The Company has also made strides in developing its operating model from scratch, advancements with regards to its regulatory positioning and also developing its plans for growth.
Most recently the Company has made significant developments with growing its operational team, non-executive board and external advisors. This has included the addition of Mr Aaron Payas CFA as the Company’s Non-Executive Director and other key team members including a Chief Technical Officer which will be announced shortly. The Company has also made ground work in looking to raise further funds through an equity round and has already received investment from angel investors in two separate rounds, with more information on funding to be disclosed in the near future.
As the Company successfully ticks off its first year, the business took the time to answer some questions with Gibraltar’s Insight Magazine to share their thoughts over the last 12 months and the year ahead.
Q: It’s been a bit of a landmark year for Gibraltar as it develops both its regulatory and business-friendly approach to Blockchain. What’s been your highlight?
On Gibraltar”s activity over the past year – we have thoroughly enjoyed the DLT and crypto community that is being fostered here in Gibraltar. 3 years ago if we would have told you that Gibraltar was going to be a hub for technology and innovative business with people visiting from all over the world you wouldn”t have believed me. At one point this year we hosted a small impromptu dinner with some of our contacts and business partners around the globe and we had 7+ nationalities at the table.
Q: Cryptocurrencies have had a bit of a dip in recent weeks – what do you think might have been the underlying reason for this?
Prices on cryptocurrencies and digital assets generally have been experiencing a downtrend since early this year. This has been a natural regression from the cryptocurrency / digital asset markets hyperbolic speculative growth on price that was experienced in the second to fourth quarters of 2017. More recently we have seen stocks also take a down-trend at the same time which is interesting as stocks and crypto are not usually correlated. Other reasons for the negative price action can be linked to the recent “Bitcoin Cash” fork and also certain regulatory decisions that have been made and are still in the balance in the United States.
Q: DAM, has just celebrated its first birthday – what was the biggest challenge you faced?
Our biggest challenge has also been the most rewarding part of our journey. The biggest challenge has been the opportunity to build our unique business absolutely from scratch in Gibraltar as a Gibraltar startup. 12 months ago there was no playbook or model as to how a business such as ours should be set up, how it should be structured and how it should be run. There was not even regulation when we set up.
We have had to build our business from the ground up on our own backs, creating our own solutions and solving big problems every single day. It”s been rewarding and hard work, but we know we”re just at the beginning of this journey and hungry to grow more. As time goes by larger frictions in operating a business such as ours are gradually easing, but we really are having to carve out the path before us in most cases.
Q: With jurisdictions such as Bermuda and Malta now focusing efforts on attracting distributed ledger technology businesses, who do you see as Gibraltar’s biggest rival in this space?
Gibraltar has been building up its regulatory positioning since approximately 2015. This has delivered the DLT regulations which we in Gibraltar have today and the support network of advisers and banking partners. Gibraltar”s popularity has accrued somewhat through word of mouth and successful projects that have been based here and marketing has also played a part in that success.
Other jurisdictions on the other hand have marketed and invested in their product much more aggressively over a shorter period of time and this is showing positive uptake. We would consider that blockchain businesses may also be considering Malta as a jurisdiction as an alternative to Gibraltar. Different jurisdictions offer their own unique propositions so it is difficult to compare like for like.
Q: Do you have any (non-financial advice) predictions for 2019?
We believe that 2019 will be a year for businesses in blockchain and the wider digital assets industry to build their technologies, models and more diverse revenue streams. In parallel we will also be seeing the consolidation of various players in the industry coming together or dropping out.
Let”s look into why.
The hyperbolic price action that came between Q2 and Q4 in 2017 saw assets such as Bitcoin go from $900 to $20,000. Many businesses grew very quickly as a result of this price action and generated large revenues but as a result those businesses which failed to plan their growth appropriately are now at a cliff edge. We have seen many businesses and ICOs who benefitted greatly from 2017″s price action. However, many of these businesses saw their cash reserves (held in crypto) sky rocket and as a result bullishly expanded their teams and development simultaneously.
This has meant that many businesses now have employees and high operating costs that cannot be sustained. This isn”t usually because these businesses have spent their capital, but because they haven”t adequately protected themselves from the downward price action of crypto.
Businesses like ours at DAM have been a cork in this storm over the past 12 months as we have chosen for sustainable growth and currently have low operating costs. We will be doubling down on development, technology and raising funds to grow successfully in 2019. There are already a few opportunities on the horizon which we will be sharing hopefully in the not too distant future.
