Expert interviews

Expert interviews

Futurist entrepreneur: Climate change is an opportunity and a duty

by Blocks99

9 months ago

Serial futurist entrepreneur in areas like exponential finance Tobias Reichmuth shares his thoughts on topics like investment in climate-change countermeasures and blockchain solutions.

As a futurist entrepreneur and investor, Tobias Reichmuth focuses on what he considers the most important challenge of the 21st century: global warming and climate change. He has founded SUSI Partners AG to mobilize institutional capital to finance energy transition infrastructure projects. He also co-founded The Singularity Group, an asset management firm based in Switzerland and Luxembourg aimed at identifying companies across all sectors that are leveraging exponential technology advancement.

Tobias sees blockchain as one of the key enabling technologies in the coming decades, and expects finance and banking to be disrupted. Accordingly, he has founded Crypto Finance Group, which provides institutional-grade services and infrastructure to institutional clients such as banks, insurers, family offices and other investors. In 2017, Tobias initiated the Crypto Finance Conference St. Moritz to educate a selected and hand-picked group of high-level investors on blockchain finance and cryptocurrencies. He also organizes business plan contests to support entrepreneurship in developing regions like in Bolivia and Kirgizstan. Blocks99 spoke with Tobias during the Singularity Exponential Finance Summit in Zurich, Switzerland, in November 2019.

Blocks99 

Please begin by talking about your background and how you became a futurist entrepreneur.

Tobias

The first word that comes to my mind is entrepreneur. I have built some companies. I think the most prominent one is SUSI Partners, that’s a front financer in the field of climate change infrastructure investments. But I have also co-founded Crypto Finance Group and The Singularity Group here, and I’m invested in some smaller startups as well.

Blocks99  

Okay, I wonder if you could just touch a little bit on SUSI Partners, because that’s a huge topic, climate change infrastructure.

Tobias

I think it’s the biggest investment opportunity in the 21st century. And the thing is, it’s not only an opportunity, it’s a duty. We have to invest a lot in energy transition infrastructure in order not to be killed. Climate change is happening. We can feel it today. And some people say, “OK, well, that’s the new normal. We have more, you know, wildfires in Australia or California, more storms.” Now the problem is, it’s not the new normal, it’s just the beginning. It will get much worse – and fast. We have an exponential curve here too, unfortunately. And so, we have to turn our whole economy into a CO2 neutral society. And this will be possible only if you invest a lot of money.

Now, the good news is that there are interesting investment opportunities and you can make attractive returns with it. So it’s not that we have to donate anything, we have to invest. The Paris Agreement, you might have heard of, stipulates that by 2050, we need to reach a CO2 neutral economy. It was calculated how much money needs to be invested to reach this goal, and we’re talking about US$ 3.1tn a year from now until 2050. And that’s why it’s the biggest investment opportunity in front of us and that’s what SUSI Partners focuses on.

Blocks99

Obviously, you think big, which makes sense as a futurist entrepreneur. It would be interesting to hear about how you originally got into the blockchain space.

Tobias

Actually, while I was at Singularity University. I was in the executive program in 2016, in Palo Alto. I had heard of Bitcoin before. But I did not really understand what potential blockchain has until I attended Singularity University. There were a lot of blockchain talks, of course, and I thought, “Wow, this is going to be the next Internet.” And this was the moment when I decided that I want to be active in this field. I talked to various friends, bought my first bitcoins – luckily early enough. At this time, it was the Wild West. People did not really understand anything about cryptocurrencies – but they engaged, invested in ICOs, etc. It was clear that guidance was needed, that serious players would have a huge opportunity.

A friend of mine, Jan Brzezek, came to me and told me about his plan to build an institutional-grade cryptocurrency fund manager and broker. He was a banker from UBS. I was easily convinced. So we built Crypto Finance Group, which is an institutional service and infrastructure provider of cryptocurrencies, including a custodian solution, fund manager and broker. And while at it, I realized that we need to educate the “old world” investors, and with some other friends I founded the Crypto Finance Conference in St. Moritz as well.

This was in 2017. The Crypto Finance Conference, also called CFC, caters to family offices and ultra-high net worth individuals. We did our first conference in January 2018 with huge success. We see this as an educational networking forum, which is very selective. We only accept 250 guests.

Blocks99

You touched on Crypto Finance AG already. I wonder if you could just say, in a nutshell, what is its vision and mission, what are its goals and purpose?

Tobias

We have a very clear mission: enable institutional investors to participate in the crypto market.

And institutional investors have higher rules to follow than an average private person. You and I can say, “Whatever, I’ll buy two bitcoins. Let’s see what happens.” A pension fund cannot do that. They need to have the whole process in place – “How can I get rid of it, at what prices, how do I store it?” That’s what Crypto Finance Group provides. It can be subsumed as services in three fields. One is storage, this is Crypto Storage AG, a custodian solution provider.  We believe that we have the best solution when it comes to “How do I store my bitcoins?” Or, for that matter, 60 other cryptocurrencies. Nobody has such a wide offer. We provide cold storage safety with instant access. That’s unique in the industry. We are then also the only provider offering an SOC-2 audited storage solution.

Blocks99

Talking about your brokerage as a futurist entrepreneur: It’s a kind of over-the-counter service?

Tobias

Well not exactly OTC. OTC would mean, “I have bitcoins, you can buy them, let’s agree on a price.” As a professional broker, you don’t do that, unless there is a very safe opportunity to be played. In the normal day-to-day business, we offer best execution. This means that we find – in all the markets available – the cheapest Bitcoin and buy it for our client. A transaction can be executed via several marketplaces, in order to get the number of bitcoins needed. Of course, this is fully automated. And again, I don’t believe that anybody can compete with the level of professionalism we have achieved here.

As you probably know, the cryptocurrency prices differ by percent and not per mil when you compare the markets. So if you wanted to buy 100 bitcoins and you can get some of them 3% cheaper in one specific market, then it makes sense if you buy 70 here, 20 there and 10 there –  that’s called best execution. So that’s what we do, fully automated. And this is why our clients at Crypto Broker are professional banks, family offices, large-scale investors.

Another division at Crypto Finance Group is Crypto Fund AG, where we offer two strategies – one is an index-based long-only strategy, which combines the 10 largest cryptocurrencies. An ideal entry product into the crypto market.  

We have another, a bit more sophisticated, quant strategy. We basically buy futures on Bitcoins and play the ups and downs in the markets – that has been extremely successful over the last year. Early in November 2019, we were recognized as the number one hedge fund among 1003 strategies by Nielsen Hedge Funds database. So, you know, this is a serious product offering, where every investor can invest via his/her banker – fully regulated and with an ISIN number.

Blocks99

I’m curious about your reach as a futurist entrepreneur – where is your client base so far?

Tobias

Europe and Asia. We have opened an office in Hong Kong with Crypto Finance Group.

Blocks99

What is going on right now with, you know, the political crisis?

Tobias

Well, Hong Kong is the door to China and it will be the door to China in the future, so we plan long term. I do not believe that Hong Kong will go under due to their struggles right now.

Blocks99

Speaking of Bitcoin – Bitcoin was born out of the 2008 financial crisis – we’d like to hear your views as a futurist entrepreneur on how the next global downturn might affect the decentralized business models?

Tobias

For me, Bitcoin is a store of value more than it is transaction enabler. And in a crisis, people are attracted to store their values. Of course, governments might lash out even harder on decentralized systems in the face of a crisis. They might try to kill new initiatives, such a s Libra for example.

On the other side, you could also argue that in a crisis, people are more creative. New things have a chance, disruptive innovation.

Should people believe in Bitcoin after 2018? Well, if you look back at 200 years of statistics, almost no currency did not lose more than 50% of its value – most of them 99%. Even the British pound, the US dollar and the Swiss franc lost value in terms of buying power. So you can say you’re strategically deprived of your value if you hold hard currencies. That will be a good reason in a crisis to say, “Let’s move into cryptocurrencies.”

Blocks99

What do you think about Switzerland’s role in the upcoming Finance 3.0 era?

Tobias

I honestly believe that we have a good chance to play a very important, if not leading, role, and I’m impressed that both our government, but also the financial market authority, FINMA, have clearly said “yes” to Crypto Nation Switzerland and Switzerland as a blockchain hub. It was at our conference, the Crypto Finance Conference in St. Moritz, when the President of Switzerland referred to Crypto Valley Zug as, “not big enough.” He said it should not be a valley, it must be Crypto Nation Switzerland. So this phrase was coined at our conference with a standing ovation. Only few weeks later the Swiss regulator FINMA approved Crypto Finance Group as the first asset manager in the crypto finance industry. Later on, they approved two private banks as crypto banks. That’s a bold move. I think Switzerland is trying to make sure that we remain a financial hub in the future. This makes sense: maybe banks won’t be as important as they are today in 10 years.

Blocks99

Great. Thank you!

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