Wisdomtree’s Executive on Crypto
Jason Guthrie, head of digital assets for asset management firm Wisdomtree in Europe, talked about cryptocurrency during Ftadviser In Focus’ fireside chat Monday.
Wisdomtree, through its subsidiaries in the U.S. and Europe, is an exchange-traded fund (ETF) and exchange-traded product (ETP) sponsor and asset manager headquartered in New York. The firm offers products covering equity, commodity, fixed income, leveraged and inverse, currency, cryptocurrency, and alternative strategies. Wisdomtree currently has over $77.8 billion in assets under management globally, according to its latest filing with the U.S. Securities and Exchange Commission (SEC).
Guthrie said, “We are past the point where there is speculation around whether or not this is a trend that’s here to stay,” emphasizing:
Cryptocurrencies have firmly established themselves as a new asset class and it truly is something that people can’t ignore.
He explained that investors will increasingly choose service providers based on their ability to gain access to the digital assets market.
The Wisdomtree executive added that many platforms are evolving strongly towards a “multi-blockchain future” with an emphasis on interoperability. He also noted that this has “broadened 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, uncertainty over how the crypto space will evolve over the next decade has led to high volatility in the crypto market. Guthrie stressed that investors need to bear this in mind when investing in this new asset class.
“I don’t think anybody is out there advocating 50% of somebody’s portfolio should be in cryptocurrency. This is how you account for risk, by making risk-assessed allocations,” he opined. His asset management firm sees people allocating between 1% and 5% of portfolios into crypto as part of a risk-adjusted approach, similar to how they treat other asset classes, he conveyed.
Replying to a question about whether crypto could become mainstream, Guthrie affirmed:
Absolutely … We are already on the path to doing that.
He added, “2% or so of the global population is involved in crypto at the moment, that’s only going to grow.”