Altcoins Are Crypto’s Stock Market & Bitcoin Is Its Gold

Altcoins are going to be collectively larger than bitcoin, said Yat Siu, executive chairman and co-founder of Hong Kong-based Animoca Brands. He likened bitcoin to gold and altcoins to the stock market.

• Utility tokens differ from meme coins because they provide a service on a network, and Animoca focuses on them.
• Picking one winner is hard, since Yahoo led among early search companies and Google was nowhere to be found.
• Tokenized funds can lower minimum purchases from $500 to $20 or less by cutting per-transaction costs.

Siu made the case in an interview with Jeremy Le Bescont, lead content manager at CoinShares. The digital asset manager is behind the CoinShares Bitcoin ETF (BRRR ) and the CoinShares Bitcoin Mining and Digital Power ETF (WGMI A-).

Gold is where people save, Siu said, while stocks give them a stake in companies that do business. He sees crypto the same way. People save in bitcoin and use altcoins such as utility tokens, stablecoins, and tokenized real-world assets like funds and bonds.

The stock market is nearly five times the size of gold, Siu said. In crypto, though, the order runs the other way, with altcoins collectively smaller than bitcoin. But he expects altcoins to overtake bitcoin.

See more: Tokenization Gains Ground & ETFs Have Room to Grow

Investors who want crypto exposure will own bitcoin, ethereum, and Solana, Siu said. They also have to own all other tokens, which he put at 35-40% of the market. He expects that share to become the majority.

Altcoins also include meme coins, Siu said. Animoca focuses on utility tokens, which provide a service on a network. Stablecoins, designed to hold a steady value, fall into that group.

Siu compared picking altcoin winners to picking search engine companies in the early internet days. Yahoo ranked first, and Google was nowhere to be found.

Spreading equal amounts across all of them and holding on would have paid off, Siu said, since Google’s returns alone would have been exceptional. Animoca takes the same approach across hundreds of portfolio companies, including OpenSea, Polygon, Kraken, and Ledger.

Regular investors can’t easily copy that approach, Siu said. Crypto venture firms such as Andreessen Horowitz and Paradigm won’t take $1,000, $100, or even $1 million, while a $10 million check might only earn a conversation.

ETFs brought traditional finance closer to crypto, Siu said, and institutions were the main bitcoin buyers through those funds. Tokens can reach those investors the same way, through ETFs or exchange-traded products.

Siu said the purpose of blockchain is collective ownership. It can give users a share of the networks they help build, instead of leaving the value with big tech platforms.

“In my mind, the way we turn everyone into a capitalist is to make them a capital owner,” he said.

Tokenization, which puts assets on a blockchain, can make ownership cheaper, Siu said. He pointed to a Davos panel with Jenny Johnson, CEO of Franklin Resources, Inc. (BEN), the parent of Franklin Templeton.

Johnson said traditional funds carried a $500 minimum because each transaction costs several dollars. Tokenized versions, however, cost a fraction as much to process. As a result, they can sell for $20 or less.

For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.