6 Reasons You Should Ask Your Financial Advisor About Crypto

6 Reasons You Should Ask Your Financial Advisor About Crypto

1. Crypto is the fastest growing asset class of the past decade

Crypto’s lexicon can be confusing to even seasoned investors, but the numbers are indisputable. More specifically, crypto is the best performing asset class of the last decade. Many successful investors have already broadly embraced crypto, and even long-time skeptics like Paul Tudor Jones, Mike Novogratz, and Kevin O’Leary are now embracing the asset class. 

A July 2021 Fidelity white paper cited growing institutional interest for the expanding set of channels offering crypto exposure. A recent Goldman Sachs report noted that while most family offices are not yet invested in cryptocurrencies, almost half are now considering ways to initiate exposure in the future. Banking giants Morgan Stanley, Goldman Sachs, and JP Morgan are now racing to compete with successful fintechs offering crypto like Robinhood, PayPal, Square, and Coinbase.

2. Millennials and Gen Z Have Already Embraced Crypto – And Boomers Will Need to Start Paying Attention

A Fall 2020 survey by Gemini revealed 42% of respondents holding crypto were between the ages of 18-34, while an additional 35% were ages 35-44. Goldman Sachs research suggests Millennials are one of the largest generations in history, and as such “are poised to reshape the economy; their unique experiences will change the ways we buy and sell, forcing companies to examine how they do business for decades to come.”

According to the latest CNBC Millionaire Survey almost 50% of millennial millionaires allocate 25% or more of their wealth to crypto. Meanwhile Gen Z is already calling Bitcoin “Boomercoin”, instead opting for even more contemporary digital assets. 

3. Crypto Is Disruptive

“Cryptocurrency” has become a misnomer as the market has diversified. Indeed most emerging crypto assets today seek to first offer utility rather than serving as a de facto currency. 

Decentralized Finance (DeFi) protocols on networks like Ethereum are disrupting private lending, borrowing, and market making services. Consumers can access these decentralized, unbiased services 24/7 without worrying about KYC (Know Your Customer). As DeFi matures, a diversity of use cases are being built, including asset fractionalization and parametric insurance. These innovations could profoundly change the real estate and insurance industries by lowering barriers to entry and removing opaque, unreliable intermediaries.

4. Crypto is Community and Culture

Blockchain technology is opening new pathways for artists and consumers to create, communicate, and transact. Audius’s decentralized music-streaming network is giving artists unrestricted creative license without need for costly and controlling middlemen, while Livepeer targets similar disruptive creation in the video streaming industry. Celebrities and sports teams are even tokenizing themselves to deepen fan engagement through issuing token-holder incentives like voting and rewards.

Burgeoning metaverses, play-to-earn games, and NFT (non-fungible token) collectibles/art markets are also fueling the fire of crypto adoption. NFTs offer users ownership of provably scarce digital assets, something previously impossible in earlier iterations of online communities. These new digital economies are processing $100 million + weekly trade volumes for assets such as metaverse real estate, in-game characters and items, and generative art.

5. Crypto is ESG

ESG investing saw exponential growth in the last decade, with relevant investments representing ~25% of all new capital invested in 2020, versus ~1% in 2014. Morningstar research suggests net new capital allocated to ESG offerings increased from ~$5 billion in 2015 to $51.1 billion by the end of 2020.

Crypto and ESG are already converging . Despite criticism for its high energy usage, Bitcoin’s appetite for low-cost electricity makes renewable energy opportunities profitable through energy arbitrage, and forward-thinking miners are collaborating to further address ESG concerns through initiatives like the Bitcoin Mining Council. Beyond Bitcoin, myriad token projects are gaining popularity as they seek to fulfill environmental, social, and governance-related issues through their efficient network economies and governance structures like DAOs.

6. Crypto could just be getting started

Despite its already immense appreciation, crypto’s potential remains largely untapped. Bitcoin alone could have over a ten-fold increase from its current ~$885 billion market cap before it fulfills its predominant narrative to surpass gold as a store of value. Beyond Bitcoin, DeFi applications built on protocols like Ethereum have hardly scratched the surface of the global derivatives markets, which some estimates place notional value between $558.5 trillion – $1.0 quadrillion (total crypto assets are currently valued at ~$2.15 trillion). 

Gemini’s same Fall 2020 survey estimated 14% crypto asset investment market penetration among U.S. adults. As Icon Ventures’ Michael Mullany points out, technological adoption begins to accelerate as early adopters give way to the early majority at ~15% market penetration. KPMG’s “Consumer Adoption: How to predict the tipping point” substantiates this idea, illustrated by the S-curve adoption model. However, discrepancies between U.S. and foreign adoption and inconsistent regulatory landscapes indeed make predicting an adoption “tipping point” difficult to estimate with precision.

As IBM suggests, crypto’s ability to broaden financial inclusivity by “banking the unbanked” is compelling. With billions of people worldwide yet to have access to meaningful internet connectivity, the maturing crypto asset industry could grow significantly by onboarding internet newcomers in the coming decade. El Salvador, the world’s first country to adopt Bitcoin as legal tender, already estimates it will save $400 million (~1.62% of their 2020 GDP) in remittance fees per year according to CNBC

As investor Naved Abdali once said, “It may take some time, but capital will eventually flow to the most logical place.”

 

A Special Announcement From Sarson Funds

On September 2nd, Sarson Funds announced the launch of its cryptocurrency financial advisor certification program, with the aim of making advisors “crypto heroes” to millions of American investor clients who have otherwise been dormant from the accelerated growth of digital assets. The eight-part webinar series will consist of live bi-weekly webinars hosted on the Digital Wealth News education portal, beginning on September 14th, 2021, and running to December 19th, 2021.

Key Takeaways:

  • Sarson Funds announced the launch of its cryptocurrency financial advisor certification program, hosted in partnership with the Investments and Wealth Institute and Digital Wealth News.
  • The eight-part webinar series will be comprised of live bi-weekly webinars hosted on the Digital Wealth News portal, from September 14th, 2021 to December 19th, 2021.
  • Advisors who complete the series will earn CE credits, plus certification as a crypto advisor from Sarson Funds, awarded as a non-fungible token (NFT) – an industry first.

To view the full announcement, including downloadable images, bios, and more, click here.

By Nathan Frankovitz & Bryan Prohm

 

JPMorgan: Launch of “JPM Coin” and Digital Asset Branch “Onyx” Will Force Wall Street to Embrace Blockchain

JPMorgan's Launch of Crypto Shifts Wall Street Sentiment of Digital Assets-Sarson Funds-Cryptocurrency Financial Advisor

JPMorgan's Launch of Crypto Shifts Wall Street Sentiment of Digital Assets-Sarson Funds-Cryptocurrency Financial Advisor

On Oct. 27th, JPMorgan announced the launch of their long-awaited “JPM Coin,” along with Onyx, their new branch for digital asset operations and custody services.

JPMorgan’s move, while contradicting to CEO Jamie Dimon’s 2017 claim that Bitcoin is a “fraud,” strategically places the bank along the cutting edge of financial technology, giving JP Morgan a strong positioning as the new age of decentralized financial services arises.

The launch of the JPM Coin along with Onyx is more than just JPMorgan jumping on the blockchain bandwagon. Rather, the launch of these services is indicative of the bank’s belief in the ever-expanding potential and use cases of blockchain technology to be a profitable and cost efficient approach to the future of financial services.

Takis Georgakopoulos, JPMorgan’s global head of wholesale payments, stated in an interview last week about blockchain’s profitability, “We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business.”

Similarly, the bank plans on utilizing the permissionless efficiency of blockchain technology as it looks to build out cost effective solutions to risky interbank transfers and cross-border payments. Blockchain technology, as we all know, is no stranger to near immediate global value transfers with just the tap of a finger. To assist in their effort to rebuild the traditional flow of money, JPMorgan has launched Liink, a P2P network built on the Onyx blockchain platform to automatically validate payments and assist in quick, secure transactions that remove the risk of third party interference and lag time.

As the crypto ecosystem enters into the era of widespread adoption, banks must future-proof themselves by recognizing trends in financial technology and embracing fintech momentum. In this day and age, it is imperative that banks alter their outdated approach to financial services and adapt a new, more efficient approach to banking: harnessing the power of blockchain technology. As JPMorgan pioneers Wall Street’s blockchain presence, financial services companies will soon be forced to follow suit in order to stay afloat in an increasingly decentralized world.

By Liam McDonald

Brian Brooks of the OCC Claims DeFi Will Soon Replace Traditional Banking

OCC Says Decentralized Finance Will Soon Replace Traditional Financial Services

Current Comptroller of the Currency and former Coinbase Chief Legal Officer Brian Brooks claims that decentralized finance (Defi) will soon replace the need for traditional banking services.

At DC Fintech Week on Oct 19th, Brooks stated that a financial future governed by permissionless, autonomous financial technology is not far away. At the rate that Defi is moving, Brooks claimed, “decentralization is very likely an unstoppable force out t here. Decentralized networks, by definition, are cheaper, faster, and more resilient than any kind of centralized structure.”

Brooks compared Defi’s momentum next to traditional banking with email’s disruption of the postal service, adding “with email, we don’t need aggregation anymore – we can do it directly with each other.” Just as email removed the need for third party mediation of communication, Defi allows individuals to perform financial services directly with each other through the algorithms within decentralized networks. Brooks stated, “It is possible for you to just go online and say, ‘Hey, listen, I’ve got $10,000 here and I’d like to earn five percent’… and the algorithm will find someone who does and all of a sudden there’s no longer a value in the bank aggregating all of that money together.”

As opinion-leading individuals like Brian Brooks of the OCC spread the word on what the future of finance will look like, this should not be Armageddon for banks. Rather, to stay afloat in an ever-changing world, Banks must adapt and adopt the momentum of fintech innovation, especially as it pertains to the promising future of blockchain technology and cryptocurrencies. If banks want to survive, they must take part in pioneering the future of blockchain technology.

By Liam McDonald