Steve Kurz, Partner & Head of Asset Management, Galaxy joined Julie Cooling, Founder & CEO, RIA Channel to discuss the 2022 digital assets investing landscape. Kurz dives into key crypto themes, opportunities and advisor allocation considerations.
The digital assets ecosystem is exploding. What was once viewed by outsiders as “a solution in search of a problem,” has quickly become a maturing asset class well-positioned to tackle global issues such as trust deficits in institutions, shifting demographics, a need for reimagined financial frameworks, inflation, privacy and data integrity. In the five years since Galaxy first launched as a digital assets manager, the crypto space has gone from a nearly underground network of early adopters and believers to a household name with roughly $2 Trillion in global assets.
Often drawing comparisons to the dawning of the internet in the late 90’s, Kurz points to crypto’s recent influx of capital, talent and innovation as key drivers for continued momentum in 2022. Like the internet did a generation ago, crypto is starting to evolve beyond a single vertical category and has the potential to disrupt the very fabric of our society. Looking ahead, Kurz highlights major themes such as DeFi 2.0, which is a refinement and leveling up of the existing decentralized finance movement, and WEB3 which speaks to a fundamental shift in how data can be owned and controlled, independent of any platform or organization.
The world of crypto is complex, fast-moving and can often be daunting for beginners. For advisors looking to allocate to the crypto asset class for the first time, but are unsure of where to begin, Kurz encourages them to get started with a passive, diversified index strategy alongside a diversified active strategy. The Galaxy team recommends a .5% portfolio allocation to digital assets as a minimum. From there, advisors can start bucketing investment opportunities into those one to two years out, those that are interesting but two to three years out, and those that are ultimately going to be noise and not an investment consideration.
Galaxy is a huge advocate for advisor education around crypto and produces a variety of high level and tactical content about the asset class.
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