“At first, I thought that Bitcoin was the dumbest thing I’d ever heard of,” says Timothy Enneking, managing director of Digital Capital Management, a hedge fund manager that focuses on digital assets. So what changed his mind?
Enneking, whose background is international finance and law, spent twenty-five years in senior corporate management roles. He worked on mergers and acquisitions for Europe’s largest independent telecommunications firm, and ran a variety of traditional funds before he got involved in crypto. He is also the chief investment officer for Mana Companies Asset Management, a nine-digit family office based in Southern California. “I haven’t had one job in forty years,” he says. “I get bored; I have too much energy.” His introduction to crypto came in 2013, when he was approached to run a Bitcoin index fund.
“I did all this research trying to find problems with Bitcoin,” Enneking recalls. “I dug and dug and dug, but I didn’t find any problems.” He thinks he’s one of the first “traditional finance guys” to embrace crypto currency, a shift that occurred when he delved deeply into the history of traditional, or fiat currency. His conclusion: “There is nothing in the crypto space that is revolutionary,” says Enneking. “It’s all evolutionary.”
A year after dipping his toes into crypto, he started his own fund, Crypto Currency Fund. Shortly thereafter, he also launched Crypto Asset Fund, which is managed by Digital Capital Management. “It was one of the early crypto funds in the U.S.,” Enneking says. “Not the first, but it's one of the few that can say it's celebrated its five-year anniversary, because a lot of them haven't survived.” One of the fund’s asset classes was recognized as the Top Performing Crypto Fund of 2021 by Crypto Fund Research. “Then they went a step further and [Prequin.com] said that Crypto Asset Fund class X was the best performing hedge fund in the world in 2021,” he says.
“Membership in Cointelegraph Innovation Circle gives everyone the cachet of legitimacy.”
While the crypto market has been extremely volatile lately, Enneking is not concerned. To hedge against the ups and downs, he says his fund is shifting more to the crypto equivalent of fixed income vehicles. But, he adds, “the volatility we’re seeing now in crypto is nothing compared to what we’ve seen a half dozen times before [with crypto].”
And he’s made an interesting observation regarding the typical profile of crypto investors. “It changes every 18 months,” Enneking says. “Ten years ago, it was libertarian maximalists and pure computer nerds. Then you got a few more finance geeks.” Now, he says, the profile of the average investor, weighted by how much they invest, has shifted toward institutions. That makes crypto less volatile, but also has the effect of tying it more closely to traditional market performance. That’s not so great for investors who are looking to diversify their portfolios with crypto.
Enneking believes strongly that the dividing line between crypto and traditional currencies will blur. “Crypto is now affecting how things are done in the fiat world,” he says. It’s a disruption that’s similar to the impact that Uber had on taxis, compelling them to take credit cards in order to compete. “Because of crypto, Western Union has radically reduced its fees because it was pricing itself out of the market,” Enneking notes. The survival of crypto is no longer in question, he says. But he expects crypto and traditional currencies to merge. “You’re going to have synthesis,” he says.
As an executive with a stellar reputation in his industry, Enneking values his membership in Cointelegraph Innovation Circle because it’s a highly vetted community of similarly reputable professionals. “There are a lot of fraudsters in the crypto space and the thing I like most about Cointelegraph Innovation Circle is they do a remarkably good job of due diligence,” he says. “The people are legit.” It’s often difficult, he notes, to find people to do business with. “Membership in Cointelegraph Innovation Circle gives everyone the cachet of legitimacy.”