Often misunderstood, crypto has an important role to play in the alternatives sleeve of a portfolio.
As an asset class, crypto is inherently liquid, has low correlations to other asset classes, including stocks and bonds, and has both high volatility and high return potential.
“We’re investment professionals, we know what to do with low-correlated liquid assets that are volatile and have high return potential. We can add them into portfolios in relatively small amounts and rebalance. Historically, that has significantly increased risk adjusted returns,” Bitwise Asset Management CIO Matt Hougan said during VettaFi’s Alternatives Symposium on November 28.
While 2023 has been a tough year for crypto as an asset class, industry experts have a positive outlook for next year. For starters, the SEC is poised to finally approve a spot bitcoin ETF. There are now a number of serious players entering the bitcoin ETF race, Dave LaValle, global head of ETFs at Grayscale, said during the symposium.