“Advisors need to accept that crypto is here to stay”

Crypto is an established asset class and will enter the mainstream, according to Jason Guthrie, head of digital assets at Wisdom Tree.

In the latest edition of FTAdviser’s Fireside Chat In Focus, in partnership with Wisdom Tree, Guthrie said: “We are past the point where there is speculation as to whether this is or not a trend that is here to stay.

“Cryptocurrencies have firmly established themselves as a new asset class and it’s really something people can’t ignore.”

He said investors will increasingly choose service providers based on their ability to access the digital asset market.

The digital assets encompass over 5,000 coins, non-fungible tokens, and topics such as the metaverse, as well as the technologies that power these protocols.

It’s those platforms that are moving heavily right now, Guthrie said, moving the technology away from a “winner takes all” investment space, which some investors might think they can’t participate in, toward a ” Multi-Channel Future” emphasizing interoperability.

It has “broadened the investment universe for a lot of people because it … means you have the ability to grow capital against a variety of protocols,” Guthrie said.

Yet, there remains a level of uncertainty about how the space will evolve over the next decade, leading to high volatility.

Guthrie said: “People need to treat this investment as such. I don’t think anyone is advocating that 50% of someone’s portfolio be in cryptocurrency. That’s how you account for risk, making allocations assessed on the basis of risk.

“We see people making 1, 2, 3, 5% of a portfolio [as part of a] risk-adjusted approach to adding it. And that’s what you see with other asset classes as well. »

So, could crypto become mainstream? “Absolutely,” Guthrie said. “We’re already on track to do that; around 2% of the world’s population is involved in crypto right now, that’s only going to grow.”

To learn more about ethical dilemmas in crypto and how crypto can help diversify a portfolio, watch the video above.

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