The Investment Opportunity of Cryptoassets. Chris Burniske: Blockchain Lead.

Transcription

1 The Investment Opportunity of Cryptoassets Chris Burniske: Blockchain Lead

2 OVERVIEW Who is ARK? What drew ARK to bitcoin? What is the current state of bitcoin ETFs? What is next for cryptoassets at large? *Bitcoin held in the portfolios through GBTC Bitcoin Investment Trust ark-invest.com 2

3 WHO IS ARK INVESTMENT MANAGEMENT? Registered Investment Adviser founded in January 2014, with $560 million in AUM as of 4/30/17 Focused solely on disruptive innovation, including autonomous vehicles, deep learning, 3D printing, genomics and blockchain technology Open source research ethos augments a variety of investment vehicles First public fund manager to have invested in bitcoin *, including two ETFs that have bitcoin exposure: ARKW & ARKK *Bitcoin held in the portfolios through GBTC Bitcoin Investment Trust ark-invest.com 3

4 WHY WAS ARK INTERESTED IN BITCOIN? ark-invest.com 4

5 A BLOCKCHAIN IS LIKE A PERSONAL COMPUTER Users interfacing with applications Companies building applications on top of the hardware and operating system stack provided by the computers & developers Blockchain Software maintained by Developers (open source vs proprietary) Trading volume is growing on an exponential scale Computers in a Distributed Network running blockchain software (e.g., Bitcoin, Ethereum, Corda, etc) ark-invest.com 5 Hardware OS Application Software End Users

6 A DISTRIBUTED LEDGER Source: ark-invest.com 6

7 BLOCKS OF TRANSACTIONS Source: ark-invest.com 7

8 BITCOIN MARKET (as of 4/30/2017) 16.3 million bitcoin outstanding Currently ~4% supply inflation/year Market capitalization >$20 billion USD Trading $ million USD on a daily basis Source: ark-invest.com 8

9 US DOLLAR & GOLD: SUPPLY SCHEDULES [1] Source: ARK Invest Research, Federal Reserve Bank of St. Louis, [2] Source: ARK Invest Research, Federal Reserve Bank of St. Louis, [3] Source: ARK Invest Research, Number Sleuth, [4] Source: ARK Invest Research, Number Sleuth ark-invest.com 9

10 BITCOIN: SUPPLY SCHEDULE [1] Source: ARK Investment Management LLC & Coinbase, data sourced from Bitcoin Wiki, [2] Source: ARK Investment Management LLC & Coinbase, data sourced from Bitcoin Wiki ark-invest.com 10

11 BITCOIN CORRELATION TO OTHER ASSETS Note: Data as of November 25, 2016 Source: ARK Investment Management LLC & Coinbase, data sourced from Bloomberg & CoinDesk ark-invest.com 11

12 BITCOIN VOLATILITY Note: Data as of April 30, 2017 Source: ARK Investment Management LLC, data sourced from CoinDesk ark-invest.com 12

13 BITCOIN ABSOLUTE PERFORMANCE (LOG) Source: Bloomberg ark-invest.com 13

14 BITCOIN ABSOLUTE PERFORMANCE Source: Bloomberg ark-invest.com 14

15 BITCOIN RISK-REWARD PROFILE Note: Data as of November 25, 2016 Source: ARK Investment Management LLC & Coinbase, data sourced from Bloomberg & CoinDesk ark-invest.com 15

16 BITCOIN VALUATION Note: Data as of May 4, 2017 Source: ARK Investment Management LLC, data sourced from Blockchain.info ark-invest.com 16

17 BITCOIN ETF SCORECARD Winklevoss Bitcoin Trust (under review) SolidX Bitcoin Trust Grayscale Bitcoin Investment Trust (decision pending) ark-invest.com 17

18 Source: SEC REJECTION OF WINKLEVOSS BITCOIN ETF The Investment Opportunity of Bitcoin & Cryptoassets ark-invest.com 18

19 BITCOIN S GROWING FAST, BUT NOT FAST ENOUGH? Source: ark-invest.com 19

20 WHAT S GROWING FASTER THAN BITCOIN? Source: ark-invest.com 20

21 THE WORLD OF CRYPTOASSETS Note: Data as of May 2, 2017 Source: ark-invest.com 21

22 THREE VERTICALS OF CRYPTOASSETS Cryptocurrencies (e.g., Bitcoin) Cryptocommodities (e.g., Ethereum) Cryptotokens (e.g., Augur) ark-invest.com 22

23 CRYPTOCOMMODITY: CLOUD STORAGE Source: ark-invest.com 23

24 WHAT S NEXT? Union Square Ventures Fat protocols, Thin applications Source: ark-invest.com 24

25 FOR FURTHER INFORMATION REGARDING ARK INVEST PLEASE CONTACT Catherine D. Wood, Founder CEO/CIO Tom Staudt, Chief Operating Officer (Interim)/Director of Product Development Kellen Carter, CCO/General Counsel (Interim) ARK Invest 155 W. 19 th Street Fifth Floor New York, New York (212) , ARK Investment Management LLC. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of ARK Investment Management LLC ( ARK ). The information provided is for informational purposes only and is subject to change without notice. This presentation does not constitute, either explicitly or implicitly, any provision of services or products by ARK, and investors should determine for themselves whether a particular investment management service is suitable for their investment needs. All statements made regarding companies or securities are strictly beliefs and points of view held by ARK, and are not endorsements by ARK of any company or security or recommendations by ARK to buy, sell or hold any security. Historical results are not indications of future results. Certain of the statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on ARK's current views and assumptions, and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The matters discussed in this presentation may also involve risks and uncertainties described from time to time in ARK's filings with the U.S. Securities and Exchange Commission. ARK assumes no obligation to update any forward-looking information contained in this presentation. ARK and its clients as well as its related persons may (but do not necessarily) have financial interests in securities or issuers that are discussed. Certain information was obtained from sources that ARK believes to be reliable; however, ARK does not guarantee the accuracy or completeness of any information obtained from any third party. ARK and its clients as well as its related persons may (but do not necessarily) have financial interests in securities or issuers that are discussed. ark-invest.com 25

26 DISCLOSURES Index Descriptions: The S&P 500 Index is a widely recognized capitalization-weighted index that measures the performance of the largecapitalization sector of the U.S. stock market. The MSCI World Index represents large and mid-cap equity performance across 23 developed markets countries. You cannot invest directly in an index and securities in an ETF will not match those in an index. The Russell 3000 Growth Index measures the performance of those Russell 3000 Index companies (the top 3,000 U.S. stocks by market capitalization covering 98% of the U.S. equity investable universe) with lower composite value scores. The Dow Jones Industrial Average is a price-weighted average of 30 large publicly owned companies based in the United States. You cannot invest directly in an index. ARK's statements are not an endorsement of any company or a recommendation to buy, sell or hold any security. For a list of all purchases and sales made by ARK for client accounts during the past year that could be considered by the SEC as recommendations go to It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list. For full disclosures ark-invest.com 26

27 THREE FEATURES OF A BLOCKCHAIN Distributed Permissionless (i.e., public) vs Permissioned (i.e., private) Cryptographically secured Immutable A blockchain is a transaction machine, and everything can be a transaction ark-invest.com 27