An executive at Wisdomtree, a revered asset management company with USD 78 billion under its portfolio, has said that digital currencies have established themselves as an important new asset class that people cannot simply ignore. He added that we have passed through the point where people were wondering whether or not the trend is here to stay.
Wisdomtree Executive’s View on Digital Currencies
The head of digital assets at Wisdomtree in Europe, Jason Guthrie, talked about cryptos during the FTAdvisor In Focus chat on Monday.
Wisdomtree, which runs subsidiaries in both Europe and the US, is an exchange-traded product (ETP) and exchange-traded fund (ETF) sponsor in New York. It also serves as an asset manager. The company’s products cover commodity, equity, fixed income, cryptocurrencies, leveraged and inverse and alternative strategies. According to its latest filing with the United States Securities and Exchange Commission (SEC), its portfolio is USD 77.8 billion in assets across the globe.
Here is what Guthrie had to say about cryptocurrencies:
“Cryptocurrencies have firmly established themselves as a new asset class and is truly something people cannot ignore.”
Guthrie added that investors would continue selecting service providers based on their commitment and ability to provide access to the blockchain and crypto markets. This is why more platforms are in the process of transformation to align operations with the multi-blockchain future. The impact is the availability of a broader investment universe for the people because they have more opportunities to get capital to work on different protocols.
However, Guthrie indicated that it was unclear how the crypto space will evolve in the next decade, a fact that has resulted in the current high volatility. Therefore, you need to be extra careful when investing in this portfolio.
He added that you should not dip over 50% of your portfolio’s funds into cryptos. This is one way of managing risk. Most firms prefer to use only 1-5% of their portfolios into cryptos as part of their risk-adjusted approaches.
Guthrie also emphasized that although only about 2% of the global population is involved in cryptos, the numbers can only grow.