Cryptocurrencies, the new asset class that should not be overlooked
The official listing of a Bitcoin ETF takes cryptocurrencies out of a state of secrecy and results in the official birth of a new asset class
by Massimiliano Marzo
The news of the former’s listing on Wall Street in recent days ETFs which are the underlying Bitcoin physicist. In many ways it is a revolution, as it is the first time that the regulator and one of the world’s most important investment houses, BlackRock (the issuer), have actually legitimized the role of cryptocurrencies.
When we talk to a boy or girl between the ages of 18 and 25, we immediately notice a great interest, if not in-depth knowledge, about the world of cryptocurrencies. Interest and knowledge that very often leads to the desire to actively participate in this market. And incredibly, there are many young people who are experts in crypto, but not in finance.
A new generation of investors.
It is clear that the official listing of a Bitcoin ETF brings this to light Cryptocurrencies From a kind of secrecy viewed by everyone with great suspicion, to a context of total visibility that leads to the official birth of a new asset class. More importantly, it is an asset class that appeals to an investor audience for whom the world of asset management has traditionally been unattractive.
Who is right? It’s certainly too early to tell, but the world ofAsset management will very quickly have to get to grips with blockchain technology and the whole world that revolves around it. The emergence of new currencies can and must, as the Bitcoin case shows, be interpreted not so much as a threat to the dollar, the euro and others, but rather as the creation of new asset classes. This is especially true when the new currencies are “backed” by wallets invested in traditional assets. In such cases, cryptoassets could represent an investment vehicle in the markets just like mutual funds and ETFs.
This revolution is already underway. Just read what is happening in the financial markets where crypto asset companies are allowed: Dubai And Singapore. Dubai, in particular, is preparing to become one of the most important financial centers in the world, considering the investments planned in the financial sector, equivalent to 8,700 billion dollars in ten years, as announced by Sheikh Bin Rashid last year. The emergence of blockchain and cryptoassets will allow greater access to the market: tokenization will allow the purchase of faster and “cheaper” instruments and it will be possible to make liquid what is not liquid, such as illiquid alternative funds created by viewed as smoke and mirrors by regulators. When you combine this with the topic of artificial intelligence, it becomes clear that both investment and subscription activities are becoming increasingly automated and less “loyal”. It can be assumed that smaller amounts will be invested using different and innovative financial instruments.
The consequences for Europe, the Micar directive
Europe is also in the process of introducing a directive Micar (Market Regulation for Crypto Assets), which will regulate the cryptocurrency sector, like Dubai and Singapore. This also represents a major challenge for regulators. In recent years we have seen a frantic rush to introduce ever stricter and more complicated rules, which have made work in the world of asset management very difficult.
The digital revolution will make it possible to achieve what has become increasingly difficult with traditional methods: generate a return on investment. Of course, diversification remains the most important point: however, it will be possible to buy diversified portfolios for every need.
The full article was published in the February 2024 issue of Wall Street Italia magazine. Click here to login.
