With the value of Bitcoin skyrocketing to more than $12,000 today from $996 at the beginning of the year, it’s easy to understand why more people are looking into cryptocurrency investing. If you want to buy some Bitcoin, it’s relatively simple: go to Coinbase, select a payment method and transfer your money. But if you want to invest in the hundreds of other cryptocurrencies on the market, it’s very convoluted.
Serial entrepreneur Dave Balter experienced this when he was trying to buy tokens for LBRY, a decentralized content-sharing platform developed by a local startup.
“It took me a few hours, and I asked my technical co-founder, ‘how do I buy it?'” Balter told BostInno. “That alone was a signal to me. The process to acquire and to ensure you have access to these coins is significant.”
That’s what led Balter to start Flipside Crypto, a cryptocurrency investment service that aims to provide wealthy individuals an easy way to buy digital tokens without the need for technical expertise. Balter, who previously founded Mylestone and Smarterer, and his co-founder Jim Meyers have built a software platform that uses algorithms to determine which cryptocurrencies have a high likelihood of a return over time.
Flipside has already deployed capital from individuals into its first two investment clubs — $1.42 million into the first and $1.35 million into the second — with the money being spread out across multiple cryptocurrencies. As of Tuesday morning, the first club’s total value was up 54 percent and the second club was up 32 percent — information that investors can find through Flipside’s online dashboard. As Flipside’s software uncovers opportunities with new cryptocurrencies, club members can vote to shift funds around.
“We see ourselves less as fund managers and more as service providers to the club.”
While cryptocurrency investing can bring big returns, Balter said he makes no promises to investors. Instead, he pitches Flipside as “the most effective way to be involved in the space and learn.” It’s also not a “get rich fast” scheme, with each club meant to hold funds over a long period. “We buy it and we hold it,” Balter said.
On Wednesday, Flipside announced the opening of its third investment club, which will be available to those with less capital to deploy. But it still won’t be cheap: the club requires investments of $15,000, $30,000 or $45,000. The upside is that unlike a traditional fund — which takes 2 percent of funds to cover expenses and 20 percent of profits — Flipside only charges a flat fee of $2,000 and then $500 for every six months after the club’s first year.
While Flipside acts as an investment service, it’s also pitching the data solutions it has developed for use by other organizations. One of the algorithms Flipside has developed tracks the performance of cryptocurrencies by analyzing their volatility while the other monitors applications that are being built on each currency’s blockchain, the decentralized ledger technology that makes these digital tokens work.
“We see ourselves less as fund managers and more as service providers to the club,” Balter said.