The promise of cryptocurrencies has a lot of investors excited, but many don’t know how to go about putting money into the emerging, complex currencies.
That’s part of the idea behind Flipside Crypto, a new Boston-based venture that helps a select group of wealthy individuals invest in digital currencies. Flipside is not a financial advisor. Co-founder Dave Balter describes the firm as a service provider that manages the process of acquiring virtual currency and storing it—handling potentially confusing things like encryption and digital wallets, for example.
Flipside says it “implements investment clubs for cryptocurrencies.” Balter says 14 individual investors put about $1.5 million into Flipside’s “Club One,” a vehicle for investing personal wealth in a basket of about 15 different cryptocurrencies. Flipside’s club members will also meet periodically to discuss the cryptocurrency market.
“We’re not in the business of telling you exactly what to buy and why,” Balter (pictured above) says. “In fact, we believe the market is so hype-filled and volatile, that’s almost impossible at this point.”
Like many ventures, Flipside was born from personal experience. Balter, an entrepreneur and investor, was curious about cryptocurrencies and wanted to try investing in them. He found that it was relatively easy to buy bitcoin through online services like Coinbase. But the process of investing in less popular forms of cryptocurrency proved challenging, he says—from figuring out how to buy it, to tracking his holdings after purchasing the cryptocurrency, to storing the digital money.
“I totally messed up,” Balter says of his early experiences. “Frankly, I probably still have currency floating around somewhere.”
Some of Balter’s peers were also interested in buying digital currencies, but didn’t know much about how that works. Balter and his Flipside partners saw an opportunity.
“The issue for most people wasn’t, ‘How would I even know what to buy?’” says Balter, who is also CEO and co-founder of the Boston startup Mylestone. “It was, ‘Even if I knew what to buy, how do I do it?’”
Flipside’s five-person team includes Jim Myers, Mylestone’s co-founder and head of engineering. Balter declined to share the names of the other three partners, but says they include a data scientist, a financial advisor, and an entrepreneur and college professor.
Flipside’s emergence speaks to several trends in technology and finance. Investments in cryptocurrencies are ballooning, but there’s a lot of noise and confusion about the nascent industry. Big banks are mostly watching from the sidelines, but “they are coming,” Balter says. “When they do, this space will start to really explode,” he adds.
Governments, meanwhile, are starting to take action. China reportedly intends to ban trading of virtual currencies on its domestic exchanges, after it banned “initial coin offerings” (ICOs). In the U.S., the SEC has reportedly said that some blockchain-based sales of cryptocurrencies may be subject to securities laws.
Balter says he welcomes regulation of cryptocurrencies.
“That’s only going to further validate there’s something real here, which I think we all know there is,” he says.
