Switzerland-based commodities fund “Tiberius Group” plans on becoming one of several traditional finance firms to try its hand at cryptocurrencies.
Its entry follows a string of offerings from big finance in the crypto space such as Bitcoin Futures, new Crypto Currency Exchanges, and optimism from some of the biggest investment banks in the world. The group, which actively manages investments in commodities such “as energy, industrial metals, precious metals, and agricultural derivatives ” made waves today by announcing that they are launching their own cryptocurrency, Tiberius Coin.
The Tiberius Group seems to be trying to avoid the extreme volatility associated with many traditional cryptocurrencies by using commodities so stable, that they are sometimes used to hedge against inflation. The group plans on distributing several different versions of the coin upon launch based on the uses of the underlying metal. One will contain rare metals such as palladium, platinum, and gold. Another will contain copper, tin, and zinc which are extremely common in industrial manufacturing. The third will be backed by aluminum, nickel, and cobalt which are extremely common in automobiles.
Like most traditional commodities, the metals underpinning the assets will be stored in the warehouses and refineries around the world. The fund’s move is part of a growing trend to use cryptocurrencies as marketing and publicity tools, following the steps of Kodak. While the coin surely has serious merit as an investment, the premium some investors anticipate it will trade at due to retail interest could make it untenable for Tiberius’ traditional client base: institutional investors. The move is a big one for such a small firm, with current assets under management at around $300 million. Pennies compared to the crypto market which just a few weeks ago was about 3/4 of the way to $1 trillion.
Cryptocurrencies backed by real-world products have grown into billion dollar market caps lately with coins like PowerLedger commoditizing power. It’s not even the first coin backed by metals, with Russian behemoth Goldmint and Singapore’s DigixGlobal with similar product offerings around non-industrial metals space is becoming a fast-growing sector of the exploding cryptocurrency industry.
What differentiates Tiberius Group is the firms’ trustworthiness among institutional investors. Unlike many cryptocurrency startups, Tiberius is a mature company with institutional clients, versatile investments, and experienced management.
Finally, the Tiberius Group is planning on meeting all the regulatory requirements of Switzerland before launching, and likely will expand their legal coverage to other countries in the coming months.
The firm also nodded at launching more currencies backed by single metals, or multiple metals in the near future. Either way, many investors feel this firm’s foray into cryptocurrency represents the tip of the iceberg as more investment banks rush into the space.
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Last modified: June 11, 2020 10:09 AM UTC