Interview: Carlos Gomez, Chief Investment Officer, Belobaba Crypto Asset Fund

Hi Carlos, thanks for joining us! Please give us a little introduction on your current role and what you do

I am the Chief Investment Officer of Belobaba Crypto Fund. We are a crypto native hedge fund dedicated to extract alpha through a diversified portfolio of liquid crypto currencies and tokens in Blockchain based projects.

I oversee the Investment function of the Fund and lead a team of 16 traders and fundamental analysts. Interacting with major investors and prospects in addition to being on top of the latest legislative developments is a big part of my role as well. I guess that here is when being a CPA and a Lawyer comes handy.

What do you consider your biggest professional achievement to date?

I would say, being able to put together the professional and academic experience gathered so far and direct it into a passion of mine which is developing a smart business in the crypto industry. Project managing teams with diverse sets of skills and located literally all over the world to design and build the first crypto hedge fund in the world regulated and with a security token is definitely at the top of the list. Please answer as many of the following questions as relevant2.

What has been your/your firm’s top 3 priorities for the coming year?

• Growing our network of Clients through winning partnerships with financial advisors, family offices and players in the crypto and financial industry.
• Continue our presence and close communication with founders of the most promissory projects in the blockchain space.
• Develop a new set of specialized products based on the needs and recommendations of our clients.

The devastating situation in Ukraine has also had a huge impact on quant trading – what has this been like for you and what are your predictions?

Not only in quant trading. The Ukraine –Russia conflict has touched a wide range of areas in the crypto space. The most relevant are:

• An increase in demand and use of cryptocurrencies specially Bitcoin to facilitate trade and 
• In parallel, an increase in regulatory oversight due to the risk in the eyes of the legislators that Cryptoassets could be used by targeted individuals to avoid sanctions imposed upon them.

Obviously, the effect of these two forces clashes against each other but I believe the net effect is positive. The situation has helped to raise awareness of the applications of cryptocurrencies in world trade and I believe that we are going to see a higher demand in the upcoming months.

To what extent do you see the use of blockchain/crypto integrating into capital markets? As crypto is becoming more mainstream, how have hedge funds responded and what could be the potential impact on capital markets?

US Secretary of the Treasury Janet Yellen said in an interview earlier this week that cryptocurrencies are now playing an important part in the investment decisions of Americans.

I concur with that appreciation and that means, family offices, financial advisors, IRA providers, traditional brokers and of course hedge funds are turning their attention to this asset class in order to capture an important market share.

In the short term we are going to see a redirection of liquidity from (the very soon to be affected) Fixed income market into crypto assets given their relatively low correlation against the Share markets.

ESG and sustainable investing is still a large topic, with many funds listening to investors’ demands and influencing their portfolio management. How do you see this progressing in the coming years?

The main issue surrounding ESG in the crypto markets is the perceived large consumption of electricity by Bitcoin mining companies.

After the ban in China and the relocation of most of the mining infrastructure in the United States where they largely use renewable or green sources to produce the electricity they need to operate, the investment community and the public opinion in general is feeling that the issue it’s been handled in a better way.

However, with the new situation in Russia, we will need to wait to see how the mining farms that I am sure are going to flourish in Russia will operate.

Alternative data is still considered a source of alpha for many – what roadblocks do firms tend to come across in sourcing, cleaning, and using this data? How do you view the alt data market at present?

In the crypto markets in general, I believe there is still between 12 to 18 months ahead of us where investment firms are going to be able to generate alpha using Alternative data. This represents good news for all of us that work in the industry and for investors. However, I think the challenge here is to find a way to organize the data from the two largest sub niches in crypto; Decentralized Finance and NFTs-Gaming.

Within an industry that is decentralized and atomized by design, these two niches require extra attention given its own nature and the firms that pay close attention to this situation will definitely hold an edge in the race for alpha.

Thanks Carlos!

Hear more from Carlos at our Quant Strats event on May 5th where he'll be talking about finding alpha in underutilized assets.