I attended a symposium on Family Office investing this past week. A couple of folks from the Fidelity Digital Assets unit shared many interesting and what I found to be valuable thoughts, and here are a few…
- Crypto volatility vs. Netflix? Are they really different?
- Yes, three years ago Bitcoin was around 5000 and now its the same price as 1.5 years ago @ 39000.
- Bitcoin mining is not an assault on Carbon. 60% of crypto mining energy is from renewable sources and innovation has significantly lowered the power requirements.
- There will only ever be 21m crypto coins ever. and the supply shrinks by 4% every 4 years. The supply is 19million right now.
- Supply and demand makes Bitcoin a store of value much different and reliable than stock, gold, art or oil.
- More applications become crypto transaction makers every day
- Bitcoin represent the first and only global payment system.
- There are valuations metrics available – macro price, on chain metrics and consumer sentiment
Some part of the world sees Crypto coins as a risk asset and trades it similar to some of the high-growth tech stocks. Another fraction of the world sees it as a risk-off, or a risk-hedge asset, a store of value. That push and that pull between those two camps, may be what defines the price range we have been sitting in the past couple of months.
You can consider us a crypto adviser firm. We have access to three custodians who will allow purchase and custody of crypto assets. We can also provide security protocol models if you prefer to hold assets personally (cold storage). Is there something you want to know more about? No one has all the answers about crypto – nor do they have all the answers about the stock market. It’s all about diversification and risk allocation process.
When I sat down in the lobby with Kyle from Fidelity Digital Assets and said that I am very curious to know how bitcoin mining works and he laughed and with a smile said – “that’s a lot to know and it really isn’t going to help you to understand that”. I loved that guidance – know what you need to know. He also shared his thoughts on how we have been allocating client assets to crypto and that built confidence in our thinking to date. If buy low and sell high is a philosophy we share, or you want to know more about how to approach the process of crypto investing, let’s set a time you prefer to talk.