Steve Kurz, Head of Asset Management at Galaxy Digital, spoke with Julie Cooling, CEO and founder of RIA channelto discuss Galaxy’s new partnership with CAIS. He also explains the benefits of investing in Bitcoin, the largest cryptocurrency, and why this store of value has received more attention and acceptance in the past 12 months.
Galaxy Digital recently announced their partnership with CAIS, the award-winning alternative investment platform. The move aims to optimize consultants' access to digital assets and to provide better information about the emerging asset class. Kurz says that the CAIS platform will help break down entry barriers and expand Bitcoin's potential investor base. The partnership also supports Galaxy’s mission to inform financial advisors about the role of digital assets in client portfolios. Galaxy will work with CAIS 'innovative tutorial, CAIS IQ, to create modularized digital asset content for continuing education loans to support advisors who want to learn more. Based on Galaxy surveys, 75% of advisors have received questions from their customers about digital assets, and over 50% of consultants expect to recommend Bitcoin assignment to their customers in the coming year. Consultants are longing for information about digital assets, and Galaxy intends to meet them where they are supposed to help them succeed in the crypto world.
The current macroeconomic environment supports Bitcoin
Uncertainty is plaguing investors, Kurz explains the current macroeconomic environment. The U.S. budget deficit is expected to reach nearly 20% of GDP in 2020, indicating that inflation could pose a risk in the coming years. This means that the patterns and tools that have been used to build portfolios over the past decade are likely to change significantly over the next decade. Briefly emphasizes the need for scarce, hard assets to hedge against potential inflation and that Bitcoin is well positioned to play this role in portfolios. Bitcoin can help protect portfolios from inflation and market downturn due to its firm supply and growth potential.
The future adoption curve shows an increase in Bitcoin interest from the institutional world and from wealth channels, a $ 20 trillion market. In addition, Bitcoin is likely to benefit from the generation change and the rapid growth of digitization currently taking place. This can already be seen in the fact that every fifth millennial has Bitcoin. Also Venmo and PayPal
Kurz also examines how Bitcoin behaves compared to other portfolio diversifiers. For example, while gold and bitcoin have similar characteristics, there are many characteristics where they differ. In a nutshell, Bitcoin can easily be a fraction of property and cross borders, and it behaves more like a growth object. While gold is seen as a stable option, bitcoin is seen as an exciting, technology-based asset with room to expand its market share. Kurz suggests that investors could benefit from an investment in both assets.
The broader universe of digital assets
Bitcoin is the most widely used digital asset, but there are more that investors should consider. Galaxy divides the broader universe of digital assets into three categories: value storage, payments and Web 3.0. Kurz says that Bitcoin clearly wins in value creation businesses. On the other hand, several assets vie for the top spot. Investors interested in the performance of the broader asset class can rely on the Bloomberg Galaxy Crypto IndexThis index seeks to improve the standardization and integrity of data across the digital asset space by reflecting the various subsections of the asset class and identifying leaders.
By applying traditional standards to the new frontier of digital assets, Galaxy wants to meet increasing investor demand with products that can be easily integrated into their portfolio mix. Consultants who are interested in Bitcoin allocation for their clients can consider this Galaxy Bitcoin Fundsthat offer low bitcoin exposure to administrative fees with safe third-party custody and trusted reporting.
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