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When Tim Cook and Elon Musk tell you that they own crypto, we know that there is a long-term outlook for the sector. These high worth individuals and long term thinkers may even consider HODLing to send the next generation to the moon. However, many traditional wealth managers are suffering from a knowledge gap. As a result, a steep technical learning curve is required to navigate the volatility seen in previous bear markets and capitalize when the bull starts running.
The exponential returns are too enticing to ignore, making Institutional investors acutely aware of the long term value of the cryptocurrency markets. Invictus Capital helps investors to gain more exposure to the markets. For them, “the focus needs to be on benefiting from disruptive innovation and advanced blockchain technology. As leading retail investors in the crypto markets our portfolio assistants are perfectly positioned to guide wealth managers and family offices in how, where and when to invest in various digital assets,” says Haydn Hammond, Sales Director and Head of Institutional Investments at Invictus Capital.
Meeting client demand
In recent months there has been an explosion in the world of DeFi services. From dApps, to staking, to the world of NFT’s, there seem to be endless innovations in the digital assets for financial services. The term crypto-curious is now regularly used to describe investors that are dipping their toes into cryptocurrencies. Some advise contributing 5% of overall portfolios. However, as the crypto assets mature, they have seen increased adoption and an influx of projects building underneath them which steadily adds to their worth.
If you are not interested in researching the markets but would like to capitalize on the performance, partnering with an expert is a wise choice. “We are seeing portfolio diversification lead to considerable returns every quarter. Having a holistic approach to your allocation of investment in crypto assets will stand the test of time”, says Hammond.
A new portfolio for a new generation
Adapting and adopting to meet the needs of a new Web 3 client will be critical to the success of projects in the near future. With 2 million daily active wallets reported by DappRadar in October, it is now an industry of its own, with the technology continuing to develop at lightning speed. This is pretty clear within the arena of DeFi services but also applies to traditional investors, many of whom are yet to realize that unless they learn the key components of cryptocurrency trading, they won’t be able to meet or facilitate client demand in the future.
“Investors are always on the lookout for opportunities that will allow them to maximise their returns whilst keeping their risks to a minimum, and cryptocurrencies are showing strong returns, period on period,” notes Heinrich Meiring, Executive Vice President: Solstreet.Finance.
Meiring continues “Unlike traditional asset classes and vehicles (such as commercial and residential real estate, hedge funds, stocks and shares), crypto-assets and holdings enjoy a greater degree of liquidity, allowing investors worldwide to buy into, and benefit from, crypto businesses that are doing well globally – even if the investor’s local jurisdiction is not. Not only are the businesses, projects, and investors in the crypto industry becoming increasingly freed of geographic and national constraints – they’re also enjoying the upside of fewer barriers to entry: lower buy-in, better potential margins when compared to the management fees involved, non-custodial wallets and an increased diversity of assets – the list goes on …”
The vast majority of financial services markets worldwide have slowly but surely woken up to the opportunities offered by blockchain technology. What may have once been considered a short term trend is now a long term opportunity, with some of the most exciting Web 3 technology emerging from the cryptocurrency bubble.
According to Hammond, “many Investors, clients and Family Offices with large portfolios are now fully aware of the long term returns offered by diverse crypto Funds. Furthermore, our C10 and C20 Funds have consistently performed for clients over the last five years.”
“Many years ago, someone could easily grow their wealth by simply buying one or two obvious crypto assets without much skill or research. Things have since become more complex. It is still possible to rapidly grow your wealth utilizing crypto assets, but now you need a great deal of time, skill and research – particularly if you want to limit certain risks. This created a desperate need for asset management. Invictus Capital have an incredible track record of doing just that, and have proven themselves able to tailor sophisticated products to large client needs. On the other hand, for the person on the street, there are Defi products that enable anyone with the time, skill and inclination to create an objectively true track record as an asset manager. And then, for those who possess the assets needed to invest in that asset manager’s fund can do so without ever transferring their assets to the asset manager. One such DeFi product is Solstreet.Finance” says Heinrich Meiring, Executive Vice President: Solstreet.Finance
Over and above DeFi products, NFTs and gaming are also factors driving increased awareness and interest in the space.
“We are seeing new crypto projects emerge every week. It isn’t just the tokens people want; it is about being part of the ecosystem and thriving with a vibrant and wealthy community.”
Navigating the world of DeFi and Crypto assets
The scepticism that was once rife across the traditional banking institutes has been replaced with optimism and a yearning to develop a deeper understanding of the significant facets offered through DeFi services. However, there is a broad knowledge gap, hindering the adoption of a cohesive approach to the best performing crypto assets.
Many traditional investors acknowledge that Bitcoin is the crypto industry equivalent of ‘gold’. However, this monopolist view ignores the reality that at least 20 other crypto assets offer meaningful alternative investment opportunities. For example, Ethereum, LTC, ADA, SOL, DOT and MATIC are now all part of massive ecosystems of innovative DeFi products and other use cases for these cryptocurrencies.
In addition, many of the projects being built underneath these layer 1 and 2 blockchains have their own tokens that are strengthening the overall sector.
Meiring says: “Long gone are the days when one could merely issue a token and see an upside without ever demonstrating value. The industry has become rapidly more sophisticated. Today, a project must prove that it contributes value to the ecosystem. It takes great talent to build an ecosystem-enhancing product, and it takes great talent to discover which projects and products are truly ecosystem-enhancing. Solstreet.Finance solve this need.”
Heading towards a cashless society
The ongoing pandemic, Covid-19, has fast-tracked the need for virtual currencies and played a large part in the adoption of crypto and DeFi products today. Unfortunately, with the virus in the air, physical currency became both dirty and dangerous.
Mainstream apps like Revolut and centralised exchanges like Binance are leading the way to provide easy ways of paying, sending and receiving crypto payments around the world. With this ease of transition from fiat to crypto, the general public is getting Increased exposure to the crypto markets via trusted platforms that are already working within many mainstream financial markets.
As investors pivot quickly towards increased crypto exposure, navigating the post-pandemic world that has been disrupted by technology will be exciting for individuals and institutions who have diversified their portfolios.
Although dynamic with high returns, investors must also assess the security risks associated with cryptocurrency investments. Partnering with a third party or developing a vetting process for exchanges in the future will be essential.
“As a third party partner for a range of institutional investors and advisors we are aware of the key concerns around market volatility and security. However, with stringent due diligence and an expert team of data analysts we effectively manage the fluctuations and ring-fence investments for the right allocation of crypto assets,” says Hammond.
