Why a diversified approach to crypto investment is logical

Once considered to be speculative investments, cryptocurrencies are becoming more and more common. In Europe, Wisdomtree is at the forefront of the head of this charge. The World Financial Services Company offers a number of products (FTE) negotiated on the stock market which offer diversification and an incredibly easy way to buy and sell cryptographic assets.

Here, Dovile Silenskyte, director of research on the digital assets of Wisdomtree, discusses the evolution of crypto as assets, the most recent adoption trends and the last ETP of Wisdomtree based on the Coindesk 20 index.

How do you see the crypto is related to a class of traditional assets?

As with each asset class, diversification is essential. Investors diversify between positions on stocks and obligations, which should not be different when considering the capital allowance to cryptocurrencies. Based only on Bitcoin is like containing only one action in a capital portfolio, which is a sub-optimal strategy in terms of risk adjusted to risk. A well -diverse approach on several digital assets can improve exposure to broader growth in the sector.

As the class of digital assets is evolving, investors need a reference to measure performance, investment and trade. The Coindesk 20 index serves as a reference index for the cryptographic industry and is the most negotiated crypto index in the world – it could be considered the S&P 500 of crypto. Adopting a wide and diversified approach through the Coindesk 20 offers a practical means of accessing opportunities on the digital asset market.

For investors who do not have access to knowledge in deep cryptography, the wide cryptography indices offer a rationalized way to obtain exposure on the market without the complexities of the selection of tokens. Just as ETF investors use funds based on the index to obtain exposure to actions without selection, a diversified cryptography index allows systematic and passive participation in the growth of digital assets.

What types of adoption trends have you seen in the past? Are there any geographical nuances that you observed?

After more than 15 years of existence, multiple cycles of boom and boust and more than half a billion users, cryptocurrencies have cemented their place as a class of major assets rather than a passage of passage. Bitcoin and ether have become integral components of institutional portfolios.

Despite the long-term growth potential of cryptocurrencies, many investors are still not sure. With a total market capitalization of approximately 3 billions of dollars, the ecosystem and use cases increase regularly. The cryptography market is now of a similar size (or larger) than basic institutional investments such as high -performance obligations, inflation bonds and emerging markets.

The adoption of the crypto is not monolithic – it varies from one geography to another based on regulatory landscapes, institutional infrastructure and economic needs. Europe opens the way with investors who can invest in Bitcoin negotiated products in the past 5 years and now have access to a wide range of Crypto coins and baskets.

How does Wisdom allow this next growth phase beyond Bitcoin?

Wisdomtree has access to crypto via ETPs since 2019. It has since increased its range to include ETPs providing exposure to five other individual parts and four diversified basket products, including its new FTE, offering exposure to Coindesk 20 storage solutions. Wisdomtree’s storage solutions also have a spread of spread. By incorporating an exercise into an crypto ETP, investors can expose themselves to the growth of these networks while participating in their security and their governance.

Tell us about the Physical Coindesk 20 ETP Wisdomtree you just launched.

The strategy helps investors to avoid the selection complexities of individual assets, as it aims to provide a safe and diversified exposure to around 90% of the market for market capitalization cryptography, helping to shape the next wave of innovation. The strategy also provides a highly diversified entry point in the cryptography ecosystem, more democratizing access to a historically difficult part of the market to which exhibition. And finally, the strategy also aims to provide a yield.

Where can anyone get additional information?

European investors can access more information on the Crypto ETP range with physical files from Wisdomtree here.

Disclosure: This material is prepared by Wisdomtree and its affiliates and is not intended to be invoked as forecasts, research or investment, and is not a recommendation, offer or solicitation to buy or sell securities or adopt an investment strategy. The opinions expressed are on the date of production and can change as the subsequent conditions vary. The information and opinions contained in this material is derived from proprietary sources and not owners. As such, no guarantee of accuracy or reliability is given and no responsibility occurring in another way for errors and omissions (including responsibility towards any person due to negligence) is accepted by Wisdomtree, nor any affiliation, nor any of their agents, employees or agents. The dependence on information in this material is at the mere discretion of the reader. Past performance is not a reliable indicator of future performance.

The opinions and opinions of the authors are the their own and not associated with the Coindesk indices. The interview was conducted by Coindesk Indices and is not associated with Coindesk Editorial.

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