Arthur Salzer explains how he avoids pitfalls in Bitcoin market
When Arthur Salzer was first introduced to crypto in 2017, he was enthusiastic yet cautious about the up-and-coming commodity.
After spending around 2,000 hours researching the asset and speaking with professionals in the industry, Salzer says he was able to conclude that the asset’s pros far outweigh its cons.
By strictly remaining with highly regulated ETFs such as the long-standing Fidelity ETF, he says he’s been able to deliver reliable returns in the sector. In 2019, most of Salzer’s clients had Bitcoin weighted at 2.5 to 7.5 per cent of their portfolios, escalating to today where clients hold five to 30 per cent of their portfolios in Bitcoin.
While its reputation as a commodity has improved, the crypto space remains fraught with fraudulent actors. Salzer says to mitigate risks, he avoids the venture exchange, which he likens to mining and prospecting. There may be shiny outlooks within this space, but Salzer says the risks are far too high to expose his clients to an area of the sector which is often unreliable.
“People love greed and fear, and the greed part brings fraud. Just because you own Bell Canada or Royal Bank stock for your grandmother doesn't mean you should hold some flyer on the Venture Exchange. And staying away from the Venture Exchange is probably a good idea. It doesn't mean you should avoid all stocks, but maybe you don't want the speculative ones with high probabilities of fraud,” he said. “Because it's a commodity, you just buy it and sell it yourself. So it's Buyer beware. And what we learned is we don't have our clients exposed to any of those areas outside of Bitcoin.”
By developing close relationships with some of the largest names in the Bitcoin sector, Salzer says that Northland has been able to ensure that it provides its clients with secure and profitable Bitcoin options. He says his years-long research and close contact with major players in the industry allows him to understand Bitcoin that goes beyond the surface level.
“Northland’s network are the professionals meeting with Donald Trump and Scott Bessent and advising them on the strategic Bitcoin reserve. That’s our due diligence, those are our network professionals,” he said. “That's very, very different than somebody at a brokerage firm or advisory firm just saying, ‘oh, I read this piece in the news, or I went to Bitcoin.com.’”
Salzer points to crypto regulation in Canada as a strong point in the industry, with the first Bitcoin ETF launched in Canada. He says this has allowed for a smoother due diligence process, as there is high transparency in the market.
“You can say a lot of things about the Canadian regulatory system, but when you look at the creation of exchange traded funds, the first ETFs in the world were approved in Canada. It took the SEC four years to approve an S&P 500 ETF, Canada was way ahead,” he said. “It shows that the Canadian markets in many cases, are far ahead of the US markets. And I think the OSC did a stellar job balancing the potential risks with what was going on, and as an ETF product, they're highly regulated. There's a lot of transparency, much more so than the private markets.”
