5 Things We Can Do To Stabilize The Cryptocurrency Markets, With Kevin Kang of BK Coin Capital

“Shoot for the moon because even if you miss, you’d be among the stars” — I have always been a big dreamer and a visionary. When you set goals, it’s not always the case that you will achieve all those goals. I think it’s very important to set the bar high for yourself, and expect more of yourself, because even if you fall short of your own expectations, you will still be far ahead of other colleagues who had set their own bar lower.

I had the pleasure to interview Kevin Kang, CFA. Kevin is a founding principal of BK Coin Capital, LP. Prior to starting his own fund, Kevin led a storied career as a portfolio manager and trader for a number of New York-based funds and banks, such as AllianceBernstein. In roles that ranged from managing over $4 billion in multi-asset portfolios specializing in US equities and fixed income to effectively collaborating with multiple portfolio managers in managing the largest US equities’ product by AUM within the firm, Kevin successfully implemented investment decisions and efficiently oversaw the firm’s daily positioning of their $40 billion portfolio. Kevin is a CFA charterholder and earned his Bachelor of Business Administration in Finance from Stetson University. He is fluent in English and Korean.

Thank you so much for doing this with us! Can you share with us the story of how you decided to pursue this career path? What lessons can others learn from your story?

My partners and I have been paying close attention to the crypto market and blockchain space for a couple of years. After the run it had in 2017, our team saw a number of cryptocurrency hedge funds emerging to capitalize on the growing space. However, most of those funds were started by people with a technology background — entrepreneurs who understood the blockchain technology inside out but not necessarily the financial piece. A few even became very wealthy as the earliest investors in cryptocurrencies. Some of the feedback our team received from investors as we began to field our own strategies were that those tech guys don’t know how to effectively manage money While they had a much better grasp on the technology being leveraged in the emerging market, they often had very little investment experience. Our team saw the need in the space fournour expertise. We took advantage of an opportunity to leverage our a traditional finance and asset management backgrounds to start our own fund with the goal of establishing cryptocurrency as a legitimate asset class within the financial market.

Can you tell me about the most interesting projects you are working on now?

My colleagues and I are currently working with the government of one of the island nations to draft new regulations on the blockchain and cryptocurrency space. It is a very exciting opportunity to engage with a state entity to help establish themselves as one of the first blockchain and cryptocurrency-friendly countries in the world. Our main objective is to draft the language of the law to be inviting for innovative companies to come in and develop the technology to use crypto without having to worry about the regulatory uncertainty. We face the challenge of ensuring the law is open, but is also rigid enough to keep out the bad players. 
 
 We are also in early stages of discussions regarding an ICO on behalf of another state to rebuild their existing infrastructure. The tokens will be the first in the world, backed by its municipality and tax revenues, and they will be collateralized with the infrastructure they seek to build.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Having born in Seoul, South Korea and growing up in a small rural town in Utah, I would have never imagined I would be building my career in New York City, which is arguably one of the best cities in the world. I moved to New York City years ago without a job lined up, started waiting tables and bartended until I landed a finance job I wanted. I have been very fortunate to have so many great people around me who helped me selflessly along the way and I would be nowhere near I am today without those great people in my life.

What are the 5 things that most excite you about blockchain and crypto? Why?

Transparency, Speed, Borderless, Easier access to capital, and Regulatory uncertainty.
 
 Blockchain technology can be applied into every industry you can imagine — from agriculture to shipping to finance. For instance, Walmart has been able to encourage its suppliers to put food on a blockchain, which allowed their vendors to shorten the time it takes to track the produce from six days to mere two seconds. The power of blockchain, in this sense, is just now being discovered on a mass scale, and that potential is thrilling.

We now live in a world where people are more connected globally and have more access to information than ever before. Yet, our banking system is very much stuck in the past. Banks still charge huge fees to transfer money from one bank to another, not to mention the astronomical price associated with an international transfer. Blockchain will reduce the time it takes to transfer money from one country to another significantly and, in turn, significantly reduce the costs associated with the process. It also gives entrepreneurs and investors a level playing field where entrepreneurs can raise capital via ICO and instantly have a near endless audience. Moreover, individual or private investors will now have access to some of the investments that were only available to institutional investors in the past. Since blockchain and crypto are both such new concepts, regulatory bodies around the world have no clue what to do with them. That uncertainty excites me, because the work my team is doing to disrupt the financial industry is only the beginning. As the technology develops and governments around the world work with companies such as ours to regulate the space, I believe this will be as big, if not bigger, than the internet.

What are the 5 things worry you about blockchain and crypto? Why?

Government, Volatility, Bubble, Frauds, Regulations
 Much of the success of cryptocurrency is a result of a distrust and lack of confidence in the government. The last few financial crises were man-made, and the public began to doubt the government and the system that they live in. Having said that, governments can make blockchain or cryptocurrencies completely illegal today if they wanted to. Blockchain technology will cut out a lot of middlemen, raising the potential of job loss given the efficiency of the software. As a result there are multinational companies lobbying the government so this technology doesn’t develop as fast as it would. My biggest concern is that the government wields too much power when it comes to the financial sector, and will abuse its power to slow down the innovation.

For cryptocurrencies to be accepted as a legitimate asset class in the financial market, its volatility should come down. However, I believe as more institutional players move into the space, the market will mature, and the prices should stabilize. I worry that its volatility will stay at current levels and will keep larger institutional players on the sideline for the foreseeable future. At the end of 2017, we saw a sort of bubble in the cryptocurrency market where everyone’s parents and their grandparents sought to get into the market, because they feared of missing out on the upside. If a real bubble forms in the future and it pops, hurting millions of retail investors, then it will take longer to convince investors to put money into blockchain or cryptocurrencies, similar to the situation we saw after the dot-com bubble. There have been cases of fraud in which the investors lost all their money after the ICO and the management team fled. The media tends to only focus on those bad players, instilling a sense of fear in the public, as well as larger investment entities, without giving them the opportunity to understand the underlying technology.

It only takes one bad apple to make the whole industry look bad, and I worry that these few fraudsters will make the job of other hardworking, innovative entrepreneurs harder.

Additionally, regulatory uncertainty is both blessing and a curse. It is exciting that we are in the very beginning of this new wave but if the regulations are too strict, as we saw with the BitLicense in New York, there will be an exodus of talents moving to other jurisdictions that have more friendly regulations on blockchain and cryptocurrencies. I would hate to see talented entrepreneurs being forced to move to other parts of the world because of unnecessary regulation. However, I am confident our lawmakers will make the right decisions.

How have you used your success to bring goodness to the world? Can you share a story?

I can’t say I have succeeded but I am grateful for all the opportunities that I have. I always try to help those who are in need. I volunteer at a local homeless shelter when the time allows. I also enjoy and dedicate a lot of my time with our interns, because they absorb everything so quickly and always bring fresh ideas from different angles to the table. The younger generation tends to be more open-minded with blockchain and crypto space so it’s been very gratifying to see them grow not only professionally, but also on a personal level.

What 3 things would you advise to someone who wanted to emulate your career? Can you share an example for each idea?

1. Follow your instinct — when I graduated from college and declined all seven job offers I had down in Florida to move to New York, everyone thought I was crazy — my parents included. I just wanted to at least give it a shot in New York and have no regret looking back in life. One of the biggest lessons I learned doing that is when your back is against the wall, you will make it happen one way or the other. As long as you believe in yourself, others opinions are just opinions. Don’t let that deter you from following your dream.

2. Don’t give up — New York City can be very draining for a lot of people. This city is definitely not for weak of heart — highs will be high and lows will be low. When things aren’t going your way, just push through. When going through tough times, it’s hard to stay optimistic but I believe we have two choices — be positive or be negative. If those are the only choices, why choose to be negative? Life is already hard enough so be positive. The only way out is through.

3. Have fun — I have seen a lot of people getting burnt out after working around the clock for a number of years. I believe work-life balance is very important. Spending time outside work, whether it’s traveling or enjoying any hobby, is critical since it stimulates the brain. I find that I tend to be a lot more productive when I get a good rest outside of work.

What is your favorite “Life Lesson Quote”? Can you share a story of how that had relevance to your own life?

“Shoot for the moon because even if you miss, you’d be among the stars” — I have always been a big dreamer and a visionary. When you set goals, it’s not always the case that you will achieve all those goals. I think it’s very important to set the bar high for yourself, and expect more of yourself, because even if you fall short of your own expectations, you will still be far ahead of other colleagues who had set their own bar lower.

Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why?

Jay-Z. His business acumen is unparalleled to others — his business empire ranges from music to beverages to sports and the list goes on. I would love to sit down with him and pick his brains on how he got to where he is today and of course, I would love to have him as one of our clients.

How can our readers follow you on social media?

We aren’t too active on social media yet but the readers can follow us on Twitter and Instagram under @bkcoincapital.