Digital assets, such as cryptocurrencies, represent an unparalleled opportunity for investors. But how can you navigate this ever-changing field, staying on top of the latest trends and regulations? Former options principal Bryan Courchesne has founded Digital Asset Investment Management (DAIM) to manage digital and traditional asset portfolios and add clarity to this emerging market.
By Daniel Coats, California Business Journal
Bryan Courchesne, founder of Newport Beach-based Digital Asset Investment Management, is no stranger to managing risk and reinventing himself in the constantly-evolving 21st century business landscape.
Impacted by the housing meltdown during the Great Recession, the Florida entrepreneur relocated to New York City to trade options in the pit of the exchange. Within a few years, he was running a successful derivatives group at a broker dealer.
Since 2013, Courchesne has studied cryptocurrencies, such as Bitcoin, setting the stage for his latest chapter: a registered investment advisory enterprise enabling investors to thrive by maintaining a balanced portfolio in the digital assets space. The process for getting the license was extremely difficult but he worked through it and says “it was worth the challenge.”
When advising clients on investing in this market, Courchesne sees great opportunity, but the need for versatility to weather the inevitable ups-and-downs of a market in which a single quarter sees a year’s worth of changes and a year is more similar to a half-decade of change in other industries.
“The goal is a balanced portfolio where you are properly weighted for risk. Portfolio-wise, digital assets generally could make up 1% to 5%, and placing them in the proper accounts, whether it be a cash or a retirement account,” he says. “It is a new capability to put these in a retirement account, a traditional IRA or Roth. There can be tax savings by doing this, which is where I believe the demand for digital assets will increase going into the future.”
Diversification of Digital Assets
While some investors have been nervously watching the plunge of Bitcoin values in recent months, Courchesne notes that the cryptocurrency par excellence has experienced three major selloffs of 70% or more in the past five years.
“The peak of Bitcoin was at 19,500 in December and there was a dramatic sell-off right after, with a double bottom – there was a low in February and again in late June,” he says. “But it seems that there is more support in the industry to build legitimacy.”
And the original cryptocurrency may have staying power: While there was an explosion in initial coin offerings (ICOs) in 2016-2017, the soon to be 10 years old Bitcoin has regained some of its former clout as of late.
Courchesne points to the appointment of Valerie Szczepanik as the first SEC associate director of the division of corporate finance and senior advisor of digital assets and innovation as an example of the growing clout the field is achieving.
To Courchesne, this demonstrates the need for investment advisors who plan to work within – not outside – the traditional regulatory framework, which is what DAIM is doing.
“Most people in this space are going away from regulations, but we wanted to work within those regulations. We are properly approved to manage digital assets making us the first of our kind,” he says. “Our goal is to add clarity to an environment where the regulations are rather unclear.”
In the future, while there are many possible classifications for coins, including commodities, securities and currencies, Courchesne foresees them as an alternative store of value, further setting the stage for the development of a significant investment market.
The DAIM Difference
While DAIM is a go-to source for individual clients, including family offices and large retail, it also offers sub-advisor services to investment advisors who seek particular expertise in the digital assets space. Courchesne says, “We have paved the way and built the bridges connecting all of the parties involved. In two or three years, I foresee that there will be changes in how these assets are protected and stored and our firm will have a way to incorporate technology to expedite the trading.” He also says, “There is a bit of latency moving from cold storage to hot storage. We aim to be involved in connecting the many intricate parts, improving the investment process, simplifying it, and reducing costs.”
Having grown up around digital technology, millennials are an obvious market for digital assets, yet DAIM is working to expand the market to earlier generations as well.
Courchesne describes what is unique about DAIM saying, “We can advise digital assets for different types of retirement accounts, while others only offer self-directed retirement accounts. We have discretion over the management of the digital assets in the client’s account, but at any time, the client can access and override if they want to,” he says. “There are always multiple eyes and full transparency, so it is reasonably secure. So if you wanted to move your coins, it can be done almost instantaneously. Whereas if you were going from one wealth manager to another, it could take up to a few weeks.” He also says, “It’s possible to move the market trying to trade a few hundred thousand electronically, we can handle more size by trading OTC.”
Though enthusiastic about the potential for digital assets, Courchesne advises his clients to take risk into account and to have more realistic expectations. “Understand all the ways you as an investor could lose on digital assets instead of being focused solely on the potential gains,” he tells clients. “It is still a story being written and it will take some time for the security and the processes to smooth out.” Courchesne suggests discussing the risk as an investor with a professional. And he says. “Once you’ve done that, make a plan and stick to it without getting emotional.”
For Courchesne, a results-oriented outlook has been one of his greatest inspirations as a professional.
“Going for results is the key. You might get responses, but results are what matter. You have to know how to distinguish the two,” he says. “I like building, I like growth, I like problem-solving. I encourage anyone to take time to reflect and think about what you want to achieve in life and then do the things that will get you there.”
DISCLAIMER: This article is for informational purposes only and does not represent a particular recommendation or investment advice. Be sure to discuss any investment advice with a qualified investment professional.
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