CountingHouse is a pre-existing, established hedge fund based in Australia. Formally established in 2013, the outfit specialises in foreign exchange arbitrage trading where it “consistently yielded profits of between 70% and 120%” between 2013-2016, according to the project white-paper.
After some experimental runs with crypto-trading strategies which began in 2017, the results were so encouraging to the team that it has now subsequently decided to set up a formal crypto-fund operation which will be based out of the Seychelles, just off the East coast of Africa.
As a result, the project is arguably the world’s first algorithmic trading-based crypto-fund crowd-funded through means of an ICO.
As the project team have all the necessary infrastructure in place to run with the operation in its post-ICO period, understanding the proposition primarily boils down to understanding its tokenomics.
The project’s proposition as outlined in the white-paper is straight-forward: fifty million ERC-20 compliant tokens (symbol: CHT) will be minted and sold to the public. The money received in exchange for these tokens will be invested directly – and immediately – upon close of the token sale.
Each token will represent a unit of holdings in the fund. The token is explicitly acknowledged to be a security token, and full KYC sign-up is required for anyone wishing to participate in the token sale. Some United States citizens may be able to invest, but on the proviso that they can demonstrate that they are “sophisticated” investors. No minimum or maximum amounts are imposed on the sale of tokens – investors can choose to invest as much or as little as they like.
The team itself will allocate 200,000 tokens of the total token mint – 0.2%, the smallest allocation we have yet seen a team attribute to itself. Those tokens will also be vested for one year. At the same time, the team will levy a 7% commission on profits gained at the end of each month as a second stream of income from the project.
The team is headed up by Mike Pomery, Director of Operations (left); and Tim Dawson, Director and Quantitative Trader (right). Pomery and Dawson are both founders of CountingHouse, and are two of the original trio of individuals which composed DPP (Dawson Pomery Pogacic), the firm from which CountingHouse was later spawned.
Pomery’s own background is in project management and business development, whilst Dawson has a similar background that also incorporates a formal background in statistics. Both individuals’ profiles can be viewed on Linkedin (these are not provided in the white-paper / website) and appear to be embedded in large networks relevant to their own business domain.
The two men appear to adhere to a higher degree of transparency than most ICOs we have dealt with, frequently making themselves available for discussion via the project’s Telegram channel.
The project has engaged the services of Amazix, arguably the leading marketing management firm for blockchain start-ups in operation today. That can generally be read as a sign of serious engagement in its marketing strategy.
The ICO is still in its early stages so social network followings are relatively modest but the large number of Youtube commentators who are discussing the project appears to reflect growing interest. However, this is one ICO where marketing is arguably less critical to the overall success of the project – the infrastructure is already in place to proceed with its operations, and the team has already achieved funding in excess of $5m USD.
Whilst there is some way to go in order to achieve the desired hard cap of $20m, this is unlike the vast majority of ICOs in existence where failing to do so implies a set of inherent risks to the project’s overall success. All else being equal, a larger hard cap is likely nonetheless preferable since it will allow for a wider scope of investment coverage which, presumably, will give in-house algorithms more data to analyse in order to improve their own performance against the markets.
For a project with more or less everything ready to go, the road map basically essentially boils down to two basic stages: a) when trading begins, b) when more advanced trading begins. The former will be implemented the day after the close of the token sale. The latter will be implemented on what will essentially be an on-going basis: the team will expand, update and improve its set of algorithmic tools to penetrate and analyse the market as a direct function of its experience and exposure to it.
This aspect of the project is straight-forward. As stated earlier, ownership of the token implies ownership of assets within the fund. Potential profits derive from two sources: speculative pricing of the CHT token on the open market, and from a share of the increased assets attributed to each token as (or if!) the fund’s value increases over time.
For investors who may be concerned about lack of market liquidity down the line for the CHT token, the fund will also offer an in-house buy-back program that will price the token based on the liquidity value of the underlying assets which make up the fund.
In other words, should any token holder find him or herself unable to sell off their holdings on the exchanges, the fund itself will purchase the tokens from you at a price that is dictated by the market value of the assets which make up the fund itself.
Over two hundred crypto-funds came into existence in 2017 alone. This, however, is arguably the first among these to propose a fund based on both algorithmic trading and a ICO crowd-sale participatory model.
The tokenised nature of the fund allows entrances and exists at any time whilst giving token holders the ability to consult in real time the value of their holdings. We may be seeing a glimpse into the future here of future fund transparency offered by the blockchain.
As for the CountingHouse Crypto-Fund itself, the proposition is not one – like most ICOs – that is a speculative, long-term investment. This is a team with an active set of trading strategies and tools for which it wants to expand its operations into the domain of crypto. One to watch.
Ratings Score Methodology: a weighted average across three scores: Concept (10% weight), Blockchain Fit (30% weight), Execution (60% weight).
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