“It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”
So said the character Sherlock Holmes, in one of Sir Arthur Conan Doyle’s famous sleuthing novels. And sleuthing is exactly what has been required in the past to pull meaningful data for institutional investors looking to invest in crypto.
For those of you who haven’t gone out to fund-raise to this sector, let me share a little about it with you. You come to an institutional investor with a new strategy – backtested and perhaps even running money currently. They then look at you and ask for a series of greeks on the strategy – deltas, alphas, betas – god knows what else – and then tell you they need you to have a 3 year live track record and at least $200M in AUM before they can continue the discussion. That’s the norm – and I know it firsthand.
NOW – enter the crypto market. Unimaginable returns that can rarely be replicated by the most savvy of hedge fund managers, are now being created and institutional investors want, no NEED, in, to generate client returns and not look like they are idiots for missing out on the sector. But they have mandates, too, and their entry points have to be wrapped up in a bow so they can show their investment committees how well-informed they were before entering into a crypto investment
Enter Fidelity. “It’s been exciting to see the tremendous growth in the digital assets data space over the past few years, and while the market is maturing rapidly, we’ve heard from institutional investors that there’s still a need for a comprehensive and accessible data solution,” said Kevin Vora, vice president, Product Management, Fidelity Center for Applied Technology (FCAT). “That’s what we’re introducing with Sherlock – robust and insightful datasets paired with highly intuitive tools to help clients make data-driven digital asset investment decisions.”
According to their recent announcement, Sherlock integrates data including:
- Development ecosystem data and in-depth analytics
- Blockchain data
- Market data
- Social media data
“We’re constantly exploring how emerging technologies can help meet the changing needs of the industry and our customers, and blockchain is one of our focus areas because we believe this technology, and digital assets, will play an important role in the financial industry’s future,” said Adam Schouela, head of emerging technology, FCAT. “Sherlock helps institutional investors research digital assets more efficiently, and we continue to experiment with it and explore how technology can help simplify other aspects of investing in this space.”
Investing in crypto for institutional investors now? “Elementary, my dear Watson”.