As bitcoin reached a new all-time high of 40K USD last night and the total crypto market capitalisation reached 1 trillion USD, this new guide from the CFA is more relevant than ever – a leading source in finance, not previously not expected for crypto assets, written by authors from US-based Bitwise. Read the guide below or contact us to learn more about crypto assets as an investment opportunity for professional investors and our Brokerage, Asset Management, Storage Infrastructure and Tokenisation services.
Source: CFA Institute Research Foundation | Authors: Matt Hougan, CIO and David Lawant, Researcher, Bitwise Asset Management
Should cryptoassets have a role in professionally managed portfolios? This brief is designed to help investors who are trying to understand cryptocurrencies and blockchain. The author answers essential questions and explains the key issues.
Bitcoin, blockchain, and cryptocurrencies burst onto the world stage in 2008, when the online posting of a pseudonymous white paper provided a vision of a new way to transfer value over the internet.
In the decade-plus since, the cryptoasset market has gone through all the classic phases of a disruptive technology: massive bull markets and crushing pullbacks, periods of euphoria and moments of despair, FOMO (fear of missing out), fear, and everything in between.
As the cryptomarket enters its second decade, one thing is clear: Crypto is not going away. Cryptoasset markets are rallying toward new all-time highs, and many of the world’s largest investors and financial institutions are getting involved.
Investors looking into crypto, however, face significant challenges. The quality of information is poor. Theories about the drivers of cryptoasset valuations are untested and often poorly designed, and they are rarely—if ever—published in peer-reviewed journals. Due diligence efforts from leading consultants are in their infancy, and few people have carefully thought through the role (if any) that cryptoassets should have in a professionally managed portfolio.
More fundamentally, few people even understand what crypto really is or why it might matter. Is it an alternative currency? A technology? A venture capital investment? A specious bubble?
The goal of this document is to provide the inquisitive investor with a clear-eyed guide to crypto and blockchain: what they are, what they are not, and where they might go from here.