Are We in a New Era of Crypto Investing?

When we talk about fintech, we’re frequently discussing how the industry is disrupting traditional banking. And is there any technology that’s more disruptive than cryptocurrencies? Although it hasn’t fully replaced our banking system, cryptocurrencies have long offered an alternative way to conduct commerce. 

But that’s just the tip of the iceberg. As digital technologies are integrated more frequently and deeply into every aspect of our lives, cryptocurrencies are becoming platforms for developing and delivering applications, providing the opportunity to completely transform almost every industry they touch. 

As a result, there is now a vast ecosystem of crypto-related services has grown significantly in recent years. One key area is cryptocurrency investing. More than just a place for individuals to buy and sell cryptocurrencies, crypto investment firms hold billions of dollars in crypto assets and manage them on behalf of their investors. 

Case in point is our guest on this week’s Fintech Growth Talk. Ryan Rasmussen is a crypto research analyst at Bitwise Asset Management, one of the largest crypto asset managers in the world. With $1.3 billion in assets across a wide variety of assets, Bitwise develops pioneering investment products, including crypto index funds that deliver secured exposure to Bitcoin and leading cryptocurrencies. Bitwise works with institutional investors, financial advisors, hedge fund managers, and others to help them understand, evaluate, and invest in crypto as an asset class. The latest Crypto Market Quarterly Review was recently published for Q3 2022, including an overview of the overall crypto landscape, biggest events, and data-driven insights.

“It’s a technology it’s really changing the way that we interact with each other, interact with the economy and interact with money,” says Rasmussen. And it has real-world consequences.

A prime example of this is Etherium’s recent shift from proof of work to proof of stake, which experts say will reduce energy requirements needed to run the blockchain by an astonishing 99.9%. This vital change, says Rasmussen, opens the door to new investors who have environmental, social and corporate governance (ESG) initiatives who are required to only invest in sustainable technologies. 

In other words, this change brings investing in crypto-based technologies one step close to the mainstream. 

Another sign that investing in crypto is going mainstream: the rise of Staking as a Service, a class of crypto-specific service providers that lower the barriers to entry by pooling stakes in crypto assets. Rasmussen points out that this service doesn’t just replicate traditional finance offerings, it introduces an entirely new financial primitive that isn’t possible in traditional markets.. 

The challenge with crypto investing, as is the case across many fintech sectors, is compliance and regulation. Because these are emerging technologies, regulatory bodies are racing to keep up. As such, compliance is a tricky topic, and it’s not always clear what regulatory framework applies to any given investment. Additionally, many crypto assets aren’t even companies per se, says Rasmussen. They’re software protocols that don’t have the same type of relationship to its users that traditional financial institutions have with their customers. 

All of this, says Rasmussen, points to the fact that crypto is no longer just about currencies. It’s about the broader web ecosystem and has the potential to impact every single industry. To learn more about this industry, we recommend you begin with this very helpful blockchain primer as well as this Decentralized Finance (or “DeFi”) primer

About Ryan Rasmussen

Ryan Rasmussen is a researcher at Bitwise Asset Management, the world’s first and largest cryptocurrency index fund. Prior to Bitwise, he held a variety of corporate finance roles at Cetera Financial Group, an asset manager with over $300 billion in assets under administration. Before Cetera, Ryan was a business analyst at Oakley and spent time as a research associate at UK Trade & Investment in Sydney, Australia. He is a graduate of the Argyros School of Business & Economics at Chapman University, with a B.S. in finance and a secondary focus in graphic and web design. 

Follow Ryan on
Twitter and LinkedIn

Listen to our full interview with Ryan Rasmussen here:

Christina Trampota
Follow me
Latest posts by Christina Trampota (see all)