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Introducing Arca Capital Management Experts In Digital Assets

Jerald David
Oct 30, 2019
When Arca Capital Management was started back in 2017, our founders created a mission statement to live by: “Building and managing institutional-caliber digital asset investment products.”
Very quickly thereafter, our team got to work. Chief investment officer Jeff Dorman began assembling the industry’s best research and trading team while chief legal officer Phil Liu began discussions with federal regulators and securities law experts. 

Closed Interval Fund For Cryptocurrencies & Digital Assets

In November of 2018, after numerous discussions with the Securities & Exchange Commission (SEC), Arca filed an N-2 with the Commission seeking to offer the first-ever closed end interval fund for cryptocurrencies and digital assets. This filing was groundbreaking.  Since then, there have been countless meetings and discussions with our lawyers and authorities and almost a dozen additional filings. Three months ago, I joined Arca to oversee this massively important project.
This innovative investment vehicle, a Blockchain Traded Fund (BTF), tokenizes commonly traded financial structures.  For investors with experience with financial products, our BTF will look very familiar. Through the use of smart contracts, the Arca BTF will issue shares in the form of digital securities (tokens) with representations on the blockchain. These tokens, or ArCoins as we are calling them, can be used as a transfer of value, traded peer to peer, and will likely narrow the gap between investments and payments through a number of additional use cases we hope to share in the coming months.
Our first product, the ArCoin Treasury Token is backed by the world’s most liquid asset: short-duration U.S. Treasuries.  We selected US Treasuries because they are highly liquid, commonly utilized, stable in price and backed by the US government.  Additionally, since US Treasuries are yield bearing, our ArCoin US Treasury Token will return a dividend in the form of interest.    
ArCoin holders will also be afforded all of the customer protections granted under The Investment Company Act of 1940, the regulatory framework used by mutual funds and ETFs.  This includes:
  • Transparent daily reporting of our Net Asset Value (NAV)
  • Independent governance including an independent board of trustees
  •  Bankruptcy protection for ArCoin holders  
Our intention is to use the BTF structure to launch a full suite of ArCoins that will tokenize additional asset classes.  Our product pipeline is robust, and we are engaging with the market regarding future product development, even for previously illiquid assets allowing for more opportunities for investors.
As we near 2020, and pending regulatory approval, we intend on launching the BTF and commencing issuance of our ArCoin.  To support this, we have been quietly working behind the scenes with our partners finalizing the backend technology and discovering several use cases to bring our offering to market. 


Stablecoin on Steroids

Through my many conversations with industry participants, our ArCoin US Treasury Token has been referred to as a “Stablecoin on Steroids”.  I find the analogy quite appropriate, especially as stablecoins have been in the headlines a lot recently.  More and more offerings are coming to market every week.  Lawmakers and government officials are calling for them to be regulated as securities.  The New York State Attorney General’s office is investigating irregularities in current practices.  Lawsuits are being filed claiming that stablecoins they are responsible for market manipulation.  All of these developments further solidify our belief that the market is ready for our ArCoin US Treasury Token, and that together, we will help to legitimize our industry.    
Another part of our customer outreach includes exploring use cases for the ArCoin US Treasury Token.  We’ve identified clearing & settlement, key infrastructure, payments, lending, and industries with friction for utilization of our ArCoin.  The range of conversations we are engaged in is broad and the potential is great.  
Which brings me back to why I joined Arca.  For the better part of the last decade, people have been fleeing Wall Street for jobs in crypto & blockchain. In fact, I worked at CME & NYMEX and was a part of the second wave of those individuals seeking to create solutions for well known and well-documented problems using this emerging technology. Having been afforded the experience of working in crypto for the past four years, I understand the challenges associated with bringing a product like this to market (I was part of the team that wrote the first BTC ETF application in 2015). If a combination of market fit, timing and product are not perfectly aligned, the launch and customer adoption could fall flat.    
I truly believe we have the right product, that we fill an ever growing gap in the market and that the time to adopt a fully regulated US Treasury Token is now. 
To learn more or talk to us about investing in digital assets and cryptocurrency
call us now at (424) 289-8068

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Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, a research report or a recommendation. Any decision to invest or take any other action with respect to the securities discussed in this commentary may involve risks not discussed herein and such decisions should not be based solely on the information contained in this document.

Statements in this communication may include forward-looking information and/or may be based on various assumptions. The forward-looking statements and other views or opinions expressed herein are made as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated and there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to change at any time. Arca disclaims any obligation to update or revise any statements or views expressed herein.

In considering any performance information included in this commentary, it should be noted that past performance is not a guarantee of future results and there can be no assurance that future results will be realized. Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain information provided herein may be based on third-party sources, which information, although believed to be accurate, has not been independently verified. Arca and/or certain of its affiliates and/or clients hold and may, in the future, hold a financial interest in securities that are the same as or substantially similar to the securities discussed in this commentary. No claims are made as to the profitability of such financial interests, now, in the past or in the future and Arca and/or its clients may sell such financial interests at any time. The information provided herein is not intended to be, nor should it be construed as an offer to sell or a solicitation of any offer to buy any securities. This commentary has not been reviewed or approved by any regulatory authority and has been prepared without regard to the individual financial circumstances or objectives of persons who may receive it. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

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©2018 by Arca Funds Past performance is not indicative of future results. Investors should carefully consider the investment objectives, risks, charges and expenses of Arca "(The "Funds"). This ad other important information about the Funds are in the respective Fund's offering documents which can be obtained by entering Arca Private Investor Portal. All of the offering documents should be read carefully before investing. Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, a research report or a recommendation. Any decision to invest or take any other action with respect to the securities discussed in this commentary may involve risks not discussed herein and such decisions should not be based solely on the information contained in this document.