Today’s crypto for advisors newsletter is written by me! Join me when I reflect on the growth of the crypto industry. Then Kim Klemballa answers from Coindesk -Index’s questions about advisers’ minds when it comes to pricing and benchmarking the asset class in “Ask the expert.”
I hope you enjoy our newsletter. Thank you for letting me be your steward. Thank you to all the amazing contributors who share their stories week after week. I look forward to where we will be in 2 years.
Webinar Alert: Explore the market for digital asset and ways to access Crypto Asset Class beyond Bitcoin. Join Ric Edelman from DACFP, David Lavalle from Grayscale Investments and Andrew Baehr from Coindesk indexes for an informative webinar on July 16 from 2 pm. 13.00 ET. Live only webinar. CE credits available. Learn more and sign up today.
– Sarah Morton
Two years in and just get started
Two years ago, I assumed the role of editor of Crypto for advisers in a central moment. It was mid-2023 and the cryptocurrency industry was in the middle of a deep winter. The collapse of larger lending platforms and the implosion of FTX had sent shock waves through the markets. The US regulatory climate was hostile, characterized by enforcement-first tactics, and self-confidence was shaken.
But even then the undercurrents of something greater impossible to ignore. Frop until today, and we are on the edge of what Bank of America calls a “One-time-in-a-Millennium transformation.” They are not talking about memes or speculation. They talk about the transformation of global financial infrastructure, economic models and digital ownership – and it is run by crypto.
An ode to Bitcoin: Genesis
“Bitcoin hears in the same breath as the printing press and artificial intelligence.” – Bank of America:
Bitcoin, born in the wake of the 2008 financial crisis, created something revolutionary: a decentralized, fast-delivering digital currency. It belonged to no government, no company and no central authority.
From there, a movement began. Early adoption so students adhere to GPUs, developers building wallets, entrepreneurs launch of exchanges and miners chasing cheap power across the globe. A technological and economic revolution took shape.
Today we see Bitcoin ETFs from the world’s largest asset leaders-black rock, Fidelity and Grayscale are the top three of AUM and even nation-state admission as countries such as the US and UAE Race to become global crypto-hubs. It is an unmatched acceleration of financial innovation.
The increase in ethereum and smart contracts
Bitcoin triggered the fire, but Ethereum and the smart contractinnovation, the introduced tool, programmability and the ability to tokenize everything: real estate, carbon credits, art, identity, shares and even yield protocols.
While Bitcoin and Ethereum dominate headlines, there are tens of thousands of digital assets. And while the investment grabs the limelight, blockchain transforms quietly supply chains, intellectual property, finance and more.
Public companies add crypto to their balance. Over 140 public companies have announced Bitcoin reserves. Exchanges such as Coinbase and Kraken will offer tokenized stocks, while retail platforms like Robinhood expand their crypto products. Access points multiply: directly to consumer platforms, ETFs (now in the hundreds)tokenized funds and direct ownership. And the list continues to grow.
The landscape has changed – are you adopting?
Only a handful of advisers were very early adoptors, but it develops slowly. There has been an expanded recognition of the opportunity – to support clients, protect conditions and win new business. It becomes increasingly common to hear from advisers that they win clients simply because they are willing to talk about Bitcoin.
On the other hand, the lack of regulation, insurmountable companies, digital assets has volatility behavior and general uncertainty with a new asset class caused hesitation. Furthermore, advisers have a lot to pay attention to- and now learn a new and always change-assignment is added to the list! Despite all this, clients want to access digital assets. The latest Coin Case Survey Data emphasizes that clients want help from their advisers and expect them to be aware of digital assets. More than 80% of respondents responded that they would be more likely to work with an advisor offering guidance in digital asset and 78% of non-Crypto investors say they would turn to an advisor whose crypto support was available. In particular, almost 90%said they planned to increase their crypto exposure in 2025.
A call for action
Blockchain is an infrastructure, crypto is more than an asset class, and the technology extends far beyond investing.
The industry matures, regulation is moving forward, and the world’s largest institutions are evolving on blockchain. As US Finance Minister Scott Bessent recently said, “Crypto is the most important phenomenon that happens in the world today.”
You don’t have to be a crypto trader or blockchain developer. But if you are a fiduciary – a guide, a planner – you owe it to your clients to understand what is happening. Education is key.
In two years of curating this newsletter, I have seen mood switch from skepticism to curiosity to strategic integration. And we’re just getting started. I’m excited to be here with you on your crypto journey. Connect with me for ideas about future topics you would like to see addressed.
And Sarah Morton, Chief Strategy Officer, Meetami Innovations Inc.
Ask an expert
Sp. Why is the same digital active priced different on each exchange?
A. Shares “Plug -in” to an exchange that allows for a, centralized price. Crypto, on the contrary, is “decentralized.” This means that there is no “plug” to price a digital asset. While crypto prices are based on supply and demand (as well as other factors)Each exchange works independently and therefore prices can vary between different exchanges.
Question: How can I find reliable price data for digital assets?
A. There are many digital asset index and data providers. Look for pricing of that (1) comes from a reputable and trusted provider with a proven track record in digital assets, (2) have a transparent and rules -based approach to construction and (3) Lays thoughtful constructed criteria for how pricing is caught. Index methodology is incredibly important. For example, if selection criteria for an index included “trade in more than one Qualified Exchange ”with eligibility thoughtful, then in case of the FTX joint, ftt (Exchange token for FTX) Wouldn’t have made it to the index. Thoughtful construction can exclude bad actors.
Question: Why do people use Bitcoin to measure the entire digital asset landscape?
A. While Bitcoin now accounts for 65% of the total market for digital asset, there were times that Bitcoin was less than 40% of the market. An asset should not be a benchmark for the entire asset class. Diversity is the key to institutional investors to control volatility and capture wider opportunities. Effective benchmarking must serve more constituencies – enabling evaluation of performance, supporting investment strategies and setting of industrial standards for everyone.
Indexes such as Coindesk 5 (CD5)Coindesk 20 Coindesk 80, Coindesk 100 and Coindesk Memecoin was constructed to meet the needs of those who want to benchmark, trade and/or invest in the ever -developing digital activities.
And Kim Klemballa, Coindesk -indexes
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