1. Cryptocurrencies such as Bitcoin have garnered significant attention due to their astronomical 2017 returns and the lack of consensus on their true value among prominent market strategists. While Athena Capital classifies cryptocurrencies as speculative assets with a high degree of volatility, we continue to evaluate this evolving market and the implications of its underlying technology, blockchain.Athena Capital Blockchain Revolution Blockchain is a digital revolution that we believe could have a significant impact on society over time. Blockchain is a distributed ledger of peer-to- peer transactions that allows for secure record storage. It forms the technical backbone for cryptocurrencies, such as Bitcoin, but also has broad application as a ledger of various records and contracts. The result is increased transparency, higher security, and lower costs. Accenture estimates that large banks could save $10 billion by using blockchain to improve the speed and efficiency of clearing and settlement[i].

2. In our opinion, Blockchain has the potential to disrupt many industries including finance, shipping, healthcare, government, auto, and fine art. For example, Walmart is using blockchain to track its supply chain to improve food safety in China[ii] and Maersk is using blockchain to digitize and simplify the paperwork of its millions of shipping containers[iii]. Like the early days of the internet, it is apparent that blockchain has significant potential value, but it will take time for an Amazon-like, game-changing technology to become readily apparent in the consumer space. Cryptocurrency: A Nascent Market The simplest application of cryptocurrency seeks to facilitate secure and low cost peer-to-peer transactions without bank oversight. The long-term outlook for cryptocurrencies will depend on their potential applications for users and how they compare to existing services. Currently, cryptocurrencies are accepted by few merchants, have low transaction bandwidth, and can have long transaction times. Source: FactSet, Athena analysis

3. Cryptocurrencies are currently too nascent and volatile to provide a credible alternative to most traditional transactions. They face a number of challenges to growth, including regulation, technology issues, scaling, environmental impact, inflows, and governance, but could eventually compete with banks, credit cards, and money transfer companies for part of the global population. While some market participants have labeled cryptocurrency a bubble, we believe that it is premature to do so while the characteristics and scope of the market have yet to be established. Investors who are well-served by traditional financial services are unlikely to derive significant utility from the use of cryptocurrencies, whereas those in emerging and frontier markets may reap benefits, especially for unbanked and underbanked populations, remittance payments, and those in politically or economically unstable regimes.

4. Investment Opportunities There are already over 1,000 cryptocurrencies, many of which have very small markets. While Bitcoin is the largest, it has been losing market capitalization to competitors including Ethereum, Ripple, and Cardano. Athena Capital classifies cryptocurrencies as speculative assets with a high degree of volatility. Investors who choose to invest in cryptocurrency should consider: Making a limited allocation consistent with their risk appetite. Coin selection is crucial as technologies vary widely. Diversification may help mitigate risk. Risks include potential liquidity challenges, regulatory and tax risk, and technological risks including hacking. In terms of implementation, cryptocurrency is typically purchased online through an exchange and stored in a wallet. There are a growing number of exchanges to choose from. If an investor chooses to make an allocation to cryptocurrency, Athena Capital suggests:

5. Choosing exchanges that are licensed and regulated by their countries of domicile. Using a “cold wallet” via non-internet connected hardware such as a USB drive. Considering cryptocurrency funds if clients seek to access more esoteric coins, as many exchanges that support those coins are not currently accepting new customers. Please refer to our landscape review for additional information on blockchain and cryptocurrencies, including an evaluation of available exchanges and wallets. [i] https://www.ft.com/content/615b3bd8-97a9-11e7-a652-cde3f882dd7b [ii] https://www-03.ibm.com/press/us/en/pressrelease/53487.wss [iii] https://www.reuters.com/article/us-usa-blockchain-ibm/ibm-maersk-in- blockchain-tie-up-for-shipping-industry-idUSKBN16D26Q Article Resource - https://www.athenacapital.com/blog/decoding- blockchain-and-cryptocurrency/https://www.athenacapital.com/blog/decoding- blockchain-and-cryptocurrency/