Cryptocurrencies have clearly established themselves as a new asset class and it genuinely is something that people can’t ignore,” says an official at Wisdomtree, an asset management business with $78 billion under management. “We are passed the point where there is a question about whether or not this is a trend that will stick around,” he continued.
During Ftadviser In Focus, Jason Guthrie, head of digital assets for asset management firm Wisdomtree in Europe, discussed cryptocurrency.
Wisdomtree is a New York-based exchange-traded fund (ETF) and exchange-traded product (ETP) provider and asset management with subsidiaries in the United States and Europe. Equity, commodity, fixed income, leveraged and inverse, currency, cryptocurrency, and alternative strategies are all covered by the firm’s products. According to its most recent filing with the US Securities and Exchange Commission, Wisdomtree presently manages over $77.8 billion in assets globally (SEC).
“We are past the stage where there is a discussion about whether or not this is a trend that is here to stay,” Guthrie said, emphasizing: “We are past the point where there is speculation about whether or not this is a trend that is here to stay.”
Cryptocurrencies have clearly established themselves as a new asset class, and they are unavoidable.
Investors would increasingly select service providers based on their capacity to access the digital asset market, he noted.
Many platforms, according to the Wisdomtree executive, are rapidly transitioning toward a “multi-blockchain future” with a focus on interoperability. This has “broadened out the investing universe for a lot of individuals because it… implies you’ve got possibilities to put capital to work against a variety of protocols,” he added.
However, the crypto market has experienced considerable volatility due to uncertainties about how the crypto industry will evolve over the next decade. Investors should keep this in mind while investing in this new asset class, according to Guthrie.
“I don’t believe anyone is arguing that cryptocurrencies should account for 50% of a person’s portfolio.” Making risk-assessed allocations is how you account for risk, he said. People are investing between 1% and 5% of their portfolios in crypto as part of a risk-adjusted approach, similar to how they treat other asset classes, according to his asset management firm.
Guthrie confirmed, in response to a query about whether crypto may become mainstream:
Without a doubt… We’re already on our way to achieving that goal.
Around 2% of the global population is active with crypto at the moment, and that’s only going to rise,” he continued.