Has the downturn blunted to the case for bitcoin allocation? Not at all, according to one advisor's numerical analysis.
Defining crypto, digital assets and the future of finance Was this newsletter forwarded to you? Sign up here. |
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Welcome to Crypto for Advisors! In this week's newsletter: "Summer doldrums" might be a complete misnomer for the state of the crypto market in the coming months. With more chatter about inflation, the Fed's possible response and prices continuing on their jagged see-saw, it seems all but certain that the latest crypto winter is just beginning. Does that mean advisors should be rethinking bitcoin and crypto as part of client allocations? Perhaps, but investing is a long game, and if you look at the raw numbers of how bitcoin has performed against traditional assets, a surprisingly positive picture emerges, according to Isaiah Douglass' highly detailed analysis – even taking into account the recent downturn. While past performance is of course not a predictor of future gains, it is a prologue worth considering. Here in the present, the tumult of the markets and its effect on the crypto industry continues, but with the information and analysis from CoinDesk, you'll be well equipped to get through the summer – er, winter – and ready to take advantage of the next cycle. – Pete Pachal, chief of staff, content Did someone forward you this newsletter? Subscribe below. |
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Facts or Feelings? Bitcoin Allocation Makes Sense Even in Nasty Bear Markets
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Johnny Johnson/Getty Images If you run the numbers, bitcoin still belongs in a financial advisor's investment toolbox.
Whenever bitcoin moves into a bear market, the victory laps commence.
My personal favorites are those who have been "anti-bitcoin" for years, often academic types that told you when BTC price was sub-$100 that it was a scam. Then they state how they were right at $20,000 bitcoin – the irony is rich.
I'm not writing this for the bitcoin bulls or those who can't be intellectually honest, but for those who fall in between bull and bear. I'm also not here to argue the fundamentals of bitcoin as a store of value; there are plenty of great articles on the why and how of that. Instead, I'd like to look at bitcoin from an investment standpoint alone and allow the math to reveal whether or not it deserves a long-term allocation for clients.
Let's begin. – Isaiah Douglass |
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The future of finance is inherently digital. As digital assets, technology, and finance continue to merge, we believe the resulting digital economy offers a more equitable, accessible, and inclusive financial future. Grayscale® Future of Finance (symbol: GFOF) is an ETF that seeks to invest in the companies and technologies that are integral in evolving the financial system. Backed by an index that combines the expertise of Grayscale, a leader in the digital asset ecosystem, and Bloomberg, a trusted authority in finance, GFOF seeks to define the "future of finance" in one thematic fund. What better way to plan for tomorrow than by investing in the future? Search symbol: GFOF in your brokerage account to start investing. Learn more here. Investing involves risks and the possible loss of principal. GFOF is distributed by Foreside Fund Services, LLC and Grayscale Advisors, LLC is the adviser. For a copy of the latest prospectus, head to the GFOF landing page. Risks: Future of Finance companies rely heavily on the success of the digital currency industry, and other developing technologies that seek to disrupt or displace established financial institutions. |
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Unsplash, modified by CoinDesk From putting bitcoin on balance sheets to setting up shop in the metaverse, brands and institutions are investing in crypto in more ways than ever.
For years, the idea that traditional finance institutions would invest in bitcoin (BTC) was laughable. But as of mid-2020, the institutional presence in the cryptocurrency became a reality. Many cite the foray of "the suits" into crypto as a contributing factor to the latest bull run that began in late 2020 and ended in late 2021.
Institutional interest in the cryptocurrency market excites current investors because institutions bring in fresh money, and certainly more money than retail can pour in.
Bitcoin, the largest cryptocurrency by market cap, is the gateway – and indeed the only stop – for many institutions that ventured into the cryptocurrency market.
Let's look at the numbers. |
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Martin Leinweber, digital asset product strategist at MV Index Solutions, discusses the "major bottom signals" he's monitoring for bitcoin. There's no return to the highly leveraged, fractionally reserved cryptocurrency system whose illusory riches are now giving way to real losses.
Meet "T Wells," a 30-something former educator who, in 2021, began working for "bounties" (or gigs) in the DAO ecosystem. By ditching Ethereum for Cosmos, dYdX has sparked claims that it has chosen sovereignty over security. There are many open-minded people in government. The industry must work with them, says CoinDesk's chief content officer. |
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Disclaimer: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets. |
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