During Ftadviser In Focus’ fireside discussion on May 2, Jason Guthrie, head of digital assets at Wisdomtree in Europe emphasised that “cryptocurrencies have firmly established themselves as a new asset class and it truly is something that people can’t ignore.” Guthrie remarked:
“We are past the stage where there is discussion about whether or not this (crypto) is a trend that is here to stay.”
Wisdomtree is a New York-based exchange-traded fund (ETF) and exchange-traded product (ETP) provider and asset management firm with $78 billion under management internationally. According to the Wisdomtree executive, many platforms are rapidly transitioning toward a “multi-blockchain future” with a focus on interoperability.
He noted that investors would increasingly select service providers based on their capacity to access the digital asset market. He further mentioned that this has resulted in “broadening out the investment universe for a lot of people because it… means you’ve got opportunities to put capital to work against a variety of protocols.”
However, the crypto market has experienced considerable volatility due to uncertainties about how the crypto industry will grow over the next decade. According to Guthrie, investors should keep this in mind while investing in this new asset class.
“I don’t think anybody is advocating that cryptocurrencies should account for 50% of a person’s portfolio. Making risk-assessed allocations is how you account for risk, ” he said.
People are investing between 1% and 5% of their portfolios in crypto as part of a risk-adjusted strategy, similar to how they treat other asset classes, according to his asset management business.
Guthrie confirmed, in response to a query about whether crypto may become mainstream:
“Absolutely… We are already on the path to doing that. At the moment, 2% or so of the global population is involved in crypto. That’s only going to grow.”
