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Noted Hedge Fund Says Crypto Hasn’t Bottomed Yet

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Alex Sunnarborg is a founding partner of Tetras Capital, a New York City-based cryptocurrency hedge fund Forbes estimates to have $30 million in assets under management. Tetras is well known for a recent bearish bet it made: It shorted ether in May 2018, a month when the digital currency’s average price was nearly $700. Today, ether hovers around $100. Before Tetras, Sunnarborg did a stint in investment banking and founded crypto exchange and research app Lawnmower, which was acquired by CoinDesk in 2017.

Forbes: How would you describe your investment strategy?

Sunnarborg: In a bull market when everything is going up, especially when bitcoin is going up, altcoins generally will return more than bitcoin. In 2017 when we launched, we were looking to make altcoin trades. [Altcoins are generally considered any crypto asset other than bitcoin.] They historically have more volatility and higher betas.

In a bear market, altcoins are still trading at a higher beta, but to the downside. In 2018, bitcoin fell about 75%, but altcoins fell 95%. It’s funny how strongly they’re still correlated, yet altcoins have a higher beta. Today, if we’re trying to hedge our exposure to this space, before we short bitcoin we look at something with a higher beta.

Forbes: You shorted ether in May 2018, when it was trading above $500. Now ether is at $100. Obviously, that went well. Was it your biggest win for 2018?

READ MORE | Why Genesis Made Over $1 Billion In Bitcoin, Ethereum And XRP Loans

Sunnarborg: I would say so, yeah.

Forbes: Where’s the bottom for ether?

Sunnarborg: It’s funny, these cryptos don’t have a good way to come to a fundamental value. I can’t tell you ether is fundamentally going to bottom at $50. It was at $10 two years ago, right? These assets trade so much relatively to each other, so I think ether’s short-term bottom would be in line with bitcoin starting to turn. If bitcoin turned tomorrow and rallied, I think ether would, too.

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ForbesOver the past few months, we’ve seen issues with ConsenSys struggling and doing layoffs. Do you think that’s a bad sign for the future of Ethereum?

Sunnarborg: Yeah. ConsenSys is an integral piece of the Ethereum ecosystem. All the Ethereum decentralized applications and products it supports have had minimal user growth. A lot of them still haven’t launched and are still pretty difficult to use, and the daily active user counts are less than 100.

Augur has about $40,000 of money at stake across all its prediction markets, but the investors behind Augur have put up tens of millions. It has a market cap of hundreds of millions. There’s this massive disconnect between how much money is still tied up in these projects and how much people actually use them.

I’ve also noticed some Ethereum developers basically talking about building on some competing blockchains. People are talking about launching on Dfinity or Polkadot. At least at a high level, it does not look or feel good. It looks like a drop in momentum and steam.

Forbes: Are you currently short ether?

Sunnarborg: I don’t think I should comment on that right now. We have not held ether since we first published our short thesis in July 2018. We then went short ether, and we have taken that position off three or four times in 2018.

Forbes: Has bitcoin bottomed yet?

Sunnarborg: I don’t think so, and I think calling that is very difficult. That’s part of the reason I’m really thankful that we’re in the position we are right now. We can hedge ourselves, remain more neutral and not have to call that exact price or timing bottom. I’m not confident right now. Our portfolio is relatively neutral—we have cash and short positions.

READ MORE | Cryptocurrency Thefts, Scams Hit $1.7 Billion in 2018: Report

Forbes: What are you buying and holding?

Sunnarborg: Obviously, I’m a huge proponent of bitcoin. And if the market were to turn right now, what liquid altcoin sector would we even look at? We’re very biased against anything that did an ICO, because we think they’re pretty much all illegal securities offerings. Just by cutting that out, you are left with a very small handful of assets. A use case I still find interesting, because bitcoin doesn’t have that functionality yet, is private transactions.

Forbes: Among privacy coins, which do you like best?

Sunnarborg: I think Mimblewimble and Grin are pretty interesting—the fair launch process, the focus on privacy and the inflation. I think zcash and monero are both still interesting.

Forbes: Can you explain what Grin did to create a fair launch?

Sunnarborg: There’s only so many projects that don’t launch their blockchain or token without an ICO or some initial funding. Grin tried to use the ethos of bitcoin of saying there’s going to be a genesis block, and people are going to start mining the coin. There’s no way you can buy it or get access to this coin ahead of time. That’s very similar to how monero launched, and both of those attract a lot of interest from people in bitcoin, largely for that reason.

Forbes: What other factors do you look at?

Sunnarborg: Another huge thing for me is the security. So, things like that recent Ethereum Classic 51% attack (when users attacked the blockchain with computing power to spend the same coins twice, undermining the primary function of the blockchain). These blockchains where it’s possible to rewrite the blockchain for not that much money relative to how much you could make by double-spending—those are immediately not attractive. Unfortunately, in the crypto space, security and price are generally very correlated. So, as the price of ether falls, it gets less secure.

Forbes: I’ve seen you tweet about the virtual reality Ethereum-based platform Decentraland. Do you like that project?

Sunnarborg: I find the concept of digital land very interesting, because of its scarcity. I like the concept of digital scarcity. This land asset seems interesting as something I could own and build on, and maybe charge players a fee for. I could sell it to someone else in the future. The value actually makes sense to me. But there’s this other token in Decentraland called mana, which was created via an ICO. You have to use mana to buy land. I absolutely hate this token; it’s totally unnecessary. I think the ICO was just done to raise money. They sold these tokens, and then essentially, they’re backing into what to do with them.

Forbes: I’ve also seen you tweet about EOS and its growing number of transactions. Are you bullish on it?

READ MORE | Why it’s in everybody’s interests to regulate cryptocurrencies

Sunnarborg: No. The one-year long, $4 billion-dollar ICO seems a little excessive to me. The whole governance system, with 21 block producers that can essentially make, vote, or deny everything, is a weird concept to me.

ForbesWhat should investors be monitoring for signals about where the market is headed?

Sunnarborg: One of the big, fundamental things I want to see is whether the Fidelity crypto trading product actually rolls out in March. And do people actually start to use it? A very similar question: What’s the status of trading platform Bakkt? Will it get approved, and are people going to use it?

And how does the composition of global exchange volume start to shape up from here? Does volume increase on regulated, brand-name platforms—platforms that the next wave of institutions would actually trust?

What I’m really looking for in all these comments: Will this market actually clean up? Can we start to trust crypto data more, like trading volume numbers? We need more regulated, trusted players to improve the trading venues, because I think right now the SEC and many people are scared of manipulation, hacks and very shady venues for trading.

What would be really good for a market bottom to happen would be for every potential bad thing to happen immediately. I would love to see the SEC come down on people really hard. One of the biggest problems in this space is there are so many bad actors, and so many were related to ICOs. The SEC just has such a massive task ahead of them.

One way to think about the bottom is that it happens when all the bad news gets washed out. At that point the only thing to do is go up, and you can’t really talk about any negative catalysts anymore, because they’ve all happened.

Basically, I think we’re pretty close to the bottom, and what would help is if some more of that clarity and action came out. It probably would have been helpful for the bottom if the VanEck exchange-traded fund would have gotten totally rejected; if the SEC slapped some more of these people around and essentially maximum pain came onto the market. At that point we would see where, if any, buyers jumped in.

Excerpted from the February 2019 issue of Forbes CryptoAsset And Blockchain Advisor.

-Jeff Kauflin; Forbes Staff

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Private Wealth: Banking On Climate Change In Africa

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Patrick Odier of Swiss wealth management firm Lombard Odier on why Africa offers immeasurable possibilities for investors, particularly those not risk-averse.


Climate change events such as floods, drought and cyclones have had a cataclysmic effect on the lives of Africans and their economies, with many having to rebuild with little to no resources, placing more strain on economies that are already over-burdened.

But are there ways to forecast these events so people are better able to weather the storm? Wealth management firm Lombard Odier thinks it has what it takes to minimize risk on the continent, and they have the years of experience to back it up.

“We are a 223-year-old company. In the financial industry, it means we have probably learned how to weather turbulences and financial market crises – we’ve survived 40 already,” Patrick Odier, chair of the board of directors at Lombard Odier, says.

“We have made South Africa central to our strategy. I think South Africa has a long history with entrepreneurship. This idea of organizing wealth, planning and optimizing the responsibilities between the members of the families – all that belongs to it.”

With that said, the bank still holds firm to its roots of running a lean organization where the idea is not to grow in quantity, but rather in quality.

“We cannot be everywhere. We don’t want to be, we’re not a giant. We are private. It makes it a bit different from other organizations where the concerns are more operational… we are purely a service-oriented company,” Odier says.

With a client-based outlook where the bank focuses on investment advisory, execution and fiduciary services, each client is handled based on their unique circumstances, but what does this mean for Africa?

“We are trying to look at the African continent with a very open eye, to look at how we can add value to those potential clients or families who may want to organize their estates and perhaps, diversify their risks. I think agriculture, together with new technologies, will represent new opportunities.”

READ MORE | The Big Bank Theory: South Africa’s Banks Of The Future

Odier says the interests of the firm are based on enhancing and not disrupting banking ecosystems that exist in the African environment.

“While Lombard Odier occupies over 2,500 people, we are still of a modest size as a financial institution. So we really want to focus on our existing client base and not disperse ourselves too much. We are not in the business of buying infrastructure banks and trying to take over. We are not in the business of competing with the local banks. We believe in teaming up, or perhaps diversifying the offering. I think when it comes to investing, we can be very useful to this market

“We believe the best institutions to serve the local market are the local ones. We are here to bring something else, which is basically, what is not offered here,” he says.

However, the continent, like any other, has challenges unique to it and thus, require nuances in resolving. It should not be discounted that, although Africa has made gains in catching up to the rest of the globe, a vast majority of its nations are still developing. 

READ MORE | Explainer: South Africa’s Central Bank – Ownership, Mandate and Independence

“The world in general is changing. You see it in everything in your life. You see it in the way you consume, the way you expect your employers to treat you and the way you think of prices. Unfortunately, you’ve seen it the way water becomes scarcer in some periods, you see also how difficult it is to produce electricity correctly, in some respects, and you see it in how climate change is affecting your life.

“All those elements are part of mega-trends we believe as a firm we could try to interpret quicker and better than some. We are transforming the way we invest to invest more sustainably. In South Africa, we want to be a leader in bringing this approach to investing in resources.

“Some say you have to have luxury to think this way, I say not doing it will create much bigger risks than doing it,” Odier says. 

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The World’s 100 Highest-Paid Celebrities

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The pop singer Taylor Swift lands the number 1 spot on the Forbes 2019 Celebrity 100 list, her highest earnings year yet.


RankNameAgeEarningsCategory
#1Taylor Swift29$185 MMusicians
#2Kylie Jenner21$170 MPersonalities
#3Kanye West42$150 MMusicians
#4Lionel Messi32$127 MAthletes
#5Ed Sheeran28$110 MMusicians
#6Cristiano Ronaldo34$109 MAthletes
#7Neymar27$105 MAthletes
#8The Eagles$100 MMusicians
#9Dr. Phil McGraw68$95 MPersonalities
#10Canelo Alvarez28$94 MAthletes
#11Roger Federer37$93.4 MAthletes
#12Howard Stern65$93 MPersonalities
#13J.K. Rowling53$92 MAuthors
#14Russell Wilson30$89.5 MAthletes
#15Dwayne Johnson47$89.4 MActors
#16Aaron Rodgers35$89.3 MAthletes
#17LeBron James34$89 MAthletes
#18Rush Limbaugh68$87 MPersonalities
#19Elton John72$84 MMusicians
#20Jay-Z49$81 MMusicians
#20Beyoncé Knowles37$81 MMusicians
#22Ellen DeGeneres61$80.5 MPersonalities
#23Stephen Curry31$79.8 MAthletes
#24Chris Hemsworth$76.4 MActors
#25Drake32$75 MMusicians
#26Kim Kardashian West38$72 MPersonalities
#27Ryan Seacrest44$71.5 MPersonalities
#28Sean Combs49$70 MMusicians
#28James Patterson72$70 MAuthors
#30Metallica$68.5 MMusicians
#31Robert Downey Jr.54$66 MActors
#32Kevin Durant30$65.4 MAthletes
#33Akshay Kumar51$65 MActors
#34Tiger Woods43$63.9 MAthletes
#35Gordon Ramsay52$63 MPersonalities
#36Rihanna31$62 MMusicians
#37David Copperfield62$60 MMagicians
#38Kevin Hart40$59 MComedians
#39Jackie Chan65$58 MActors
#39Travis Scott28$58 MMusicians
#41Katy Perry34$57.5 MMusicians
#41Justin Timberlake38$57.5 MMusicians
#43BTS$57 MMusicians
#43Bradley Cooper44$57 MActors
#43Pink39$57 MMusicians
#43Adam Sandler52$57 MActors
#47Scarlett Johansson34$56 MActresses
#48Ben Roethlisberger37$55.5 MAthletes
#49Lewis Hamilton34$55 MAthletes
#49Anthony Joshua$55 MAthletes
#49Khalil Mack28$55 MAthletes
#52Russell Westbrook30$53.7 MAthletes
#53Billy Joel70$52 MMusicians
#54Bruno Mars33$51.5 MMusicians
#55Novak Djokovic32$50.6 MAthletes
#55Mike Trout27$50.6 MAthletes
#57Jimmy Buffett72$50 MMusicians
#57Eminem46$50 MMusicians
#59Fleetwood Mac$49 MMusicians
#59Judy Sheindlin76$49 MPersonalities
#61Phil Mickelson49$48.4 MAthletes
#62Ariana Grande26$48 MMusicians
#62Paul McCartney77$48 MMusicians
#64James Harden29$47.7 MAthletes
#65Conor McGregor30$47 MAthletes
#66DeMarcus Lawrence27$46.9 MAthletes
#67Sean Hannity57$46 MPersonalities
#67The Chainsmokers$46 MMusicians
#69Steve Harvey62$45 MPersonalities
#70Bryce Harper26$44.5 MAthletes
#71Guns N’ Roses$44 MMusicians
#72Chris Paul34$43.8 MAthletes
#73Chris Evans$43.5 MActors
#74Kyrie Irving27$43.3 MAthletes
#75Giannis Antetokounmpo24$43.2 MAthletes
#76Jennifer Lopez49$43 MMusicians
#76Sofía Vergara47$43 MTelevision actresses
#78Luke Bryan42$42.5 MMusicians
#79Drew Brees40$42.4 MAthletes
#80Simon Cowell59$42 MPersonalities
#81Aaron Donald28$41.4 MAthletes
#82Damian Lillard28$41.1 MAthletes
#83Paul Rudd$41 MActors
#83Jerry Seinfeld65$41 MComedians
#83Rolling Stones$41 MMusicians
#86Sebastian Vettel32$40.3 MAthletes
#87DJ Khaled43$40 MMusicians
#87Marshmello27$40 MMusicians
#87The Weeknd29$40 MMusicians
#90Lady Gaga33$39.5 MMusicians
#91Blake Griffin30$39.1 MAthletes
#92Dave Matthews Band$39 MMusicians
#92Rory McIlroy30$39 MAthletes
#94Paul George29$38.6 MAthletes
#95Zac Brown Band$38.5 MMusicians
#95Calvin Harris35$38.5 MMusicians
#95Kendrick Lamar$38.5 MMusicians
#98Brandin Cooks25$38 MAthletes
#98Shawn Mendes20$38 MMusicians
#100Celine Dion51$37.5 MMusicians

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Making Up For Millions

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While a growing number of influencers are dictating what brands sell, beauty entrepreneur Jackie Aina is of the view they have the duty to use their platforms responsibly.  


Mixing up the inspirational with informative, the thought-provoking with tongue-in-cheek, and sarcasm with calling out brands for not being inclusive, Jackie Aina is influencing the beauty industry one product at a time.

With over three million YouTube followers and 1.2 million on Instagram, Aina is one of the stand-out digital influencers cashing in on online followings to broadcast messages to millennials, lifestyle brands and billion-dollar cosmetic conglomerates.

Although Aina does all of this with a dose of humor, the journey to YouTube stardom started some 10 years ago for the 31-year-old beauty entrepreneur, when she was desperately searching for a way to escape loneliness and unfulfillment.

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“I had gone on to marry the guy who inspired me to join the military. We were stationed in Hawaii and we were very unhappily married. I didn’t have a job and YouTube was buzzing in 2009. We had a lot of Asian faces who were really the faces of beauty on YouTube and I didn’t really see anyone like me. So, my best friend, literally every day, said ‘why don’t you put your makeup looks on YouTube’ and I always said no.”

Her friend’s unrelenting pursuit finally paid off. 

“So, one day, I decided I wasn’t doing anything, and being bored and not being fulfilled emotionally and I didn’t have a lot of positive things going on for me at the time, so that left me a lot of time to consume content and then I started creating it.

 “I truly tapped into something that I needed at the time mentally and that was great. People didn’t know me but they would just gas me up; they were so nice and would always give me positive encouragement which I really needed at the time,” Aina says.

That was a lifetime ago. These days, the Los Angeles-born influencer, who was called  ‘beauty influencer of the year’ by Women’s Wear Daily last year, is short-listed among the top beauty influencers in the United States, with lucrative brand collaborations behind her.

Most notably is her collaboration with the Estée Lauder-owned brand, Too Faced, as part of the Born This Way foundation range, which she helped to create.

Celebrities and influencers are increasingly being paid several thousands of dollars per tweet or Instagram post to promote products, services and even social causes.

With most millennials avoiding posts that look like sponsored ads, brands are now increasingly interested in ads that appear organic. And that is where influencers come in.

Remuneration for such posts is usually decided after considering factors like number of followers, popularity, engagement, frequency of posts, as well as the format of the post.

Furthermore, influencer accounts with  massive follower counts can leverage their social media clout to showcase brands to their followers and perhaps, most importantly, use their brand voice to fight against injustice in the industry, something Aina is passionate about.

“A lot of years on YouTube were spent seeing comments from people who say things. It is easy to sit and complain but what are you doing to change the industry?”

In response, Aina decided to use her platform to fight for the change she wanted to see in the industry. She holds other influencers accountable for offensive remarks and joins controversial and tough discussions about issues like colorism in the beauty industry. And brands are starting to listen.

It was her outspoken voice in the beauty space that caught the attention of the beauty conglomerate, Too Faced, which short-listed Aina to help expand its foundation range and ensure the makeup undertones would also compliment women of color.

READ MORE | At 21, Kylie Jenner Becomes The Youngest Self-Made Billionaire Ever

“That was a testament to brands actually listening. Just because you think someone is not watching, doesn’t mean they are not watching. They are definitely watching. Sometimes all you really need is that one opportunity and that can be leveraged over and over again,” Aina says.

As brands increasingly turn away from traditional marketing, towards social influencers, young, connected digital natives like Aina, will continue to play an important role in the success of beauty brands for the foreseeable trend-obsessed digital future.

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