As the stock market and world continue to change in unexpected (some might say, dizzying) ways, many people are turning to alternative investment opportunities. Of these opportunities, one of the most sought after, and least understood, is cryptocurrency investing.
To help get a better understanding of this asset class, Morning Brew’s own Kinsey Grant sat down with Michael Sonnenshein of Grayscale Investments and Doug Boneparth, CFP® of Bona Fide Wealth. In a wide-ranging conversation, our experts helped debunk some crypto myths and discussed the bright future of an asset class that is still very much in the early stages of growth.
If you missed the discussion, you can watch the video on-demand right here. Now see below for some key takeaways from our virtual roundtable, The Who, What (and WTF?) of Crypto Investing, sponsored by Grayscale Investments.
Time for Growth
As both Doug and Michael made clear, cryptocurrency is still in the very early stages of its life cycle. Since Bitcoin was only created in 2008, investors and service providers are still mostly on the “ground floor” in terms of what is possible.
However, at this point, large financial institutions are making investments in the broader digital currency market, or even piloting programs themselves. As Michael said, “You’d rather be the Netflix than the Blockbuster” when it comes to crypto.
Millennials Are Investing
Unsurprisingly, as the first generation to basically grow up with a keyboard in their hand, millennials have flocked to crypto investing more than any other demographic. A recent study by Charles Schwab found that millennials had a higher holding in Grayscale Investment’s Bitcoin Trust than in Netflix.
This group especially is always looking to technology to help remove barriers and find more accessible ways to do things. In the typically slow and staid world of finance, cryptocurrency offers a democratized, tech-forward way to invest on your own terms.
Double the Diversification
Most investors know a well-diversified portfolio is a healthy portfolio. It helps mitigate risks and insulates investors from huge market swings. As Michael and Doug discussed, this can also be achieved by investing in crypto.
They recommended not only adding Bitcoin to your portfolio, but also looking at a range of crypto as well (like Ethereum or Litecoin to name only a couple). As all of these currencies have different uses than Bitcoin—which is typically looked at as a digital store of value—investors can match their holdings to their vision of the future.
Lots to Learn
Both Michael and Doug made clear that crypto investing is an entire ecosystem—you could learn something new every day. So while this conversation set a good baseline on the world of crypto investing, we recommend continuing to research just how this asset class can work in your portfolio.
(Watch the virtual round table on-demand right here.)