Updated: Feb 26, 2020
Finance is a sphere of world trends converted into transactions, profits and acquisitions. Experts might argue otherwise for its complexity but the final breakdown is who gets what, and who controls what. Crypto space started out as an idea for de-institutionalizing finance but, over a decade after the first bitcoin was created, cryptocurrency has become incorporated into finance and is a strong contributor to the national standing among most developed countries.
This sophistication of digital currency has led to the branching out of crypto space to involve several aspects which have been discussed on the TF Block Chain podcast hosted by Jonathan G. Blanco. These branch-outs include; crypto hardware manufacturing, enterprise, taxation and in this latest discussion, investment. While crypto trading and mining are forms of investment in crypto at the surface level, investing time, money and energy into making more money, in recent times the investment in cryptocurrencies have become further institutionalized –leading to a complex nature.
The complexity of crypto investments was extensively discussed by experts in the field, Dan Eyre (Co-founder/CEO, Blockchange) and Brock Connelly (Founder/CEO, Round Block Capital), during the session on ‘Institutional Investors and Crypto 2020’ at the Seattle Chapter of TF Blockchain, led by Paul Rapino.
Dan Eyre offered majority of the information on financial planning and analysis, with due regards to his status as a Registered Investment Advisor (RIA), while Brock Connelly gave the detailed breakdown of digital assets from his position as CEO of a NFA Registered Brokers company, and experience in trading for different people at any level of income. In the course of their discussion, they concurrently explained the evolution of crypotcurrency from an abstract concept into one of the leading investment options for digital assets. With adequate details on the development of major crypto currencies as digital assets for investment purposes, they offered expert advice on the versatility of crypto trading and its implication for national economy, as well as personal financial improvement.
A significant aspect of their discussion was the importance of institutional investors for crypto investments. Typically, institutional investors are groups or companies who put funds towards purchasing real estate, securities, industry shares and a range of financial (profitable) assets. While they purchase the investment, they are simply channels for the primary beneficiaries of the investment benefits. They function in the same way as facilitators for securing profitable investments which they put out for interested individuals to partake in; in some cases, it is the capital contribution of members of that investment pool which is used to purchase and maintain the investment. They also manage the asset, developing and improving it within their assigned jurisdiction, as custodians. During the podcast session, it was also explained that investment marketing is also highly dependent on the intelligence of both broker and owner, as some investors are non-custodians –meaning, they cannot explicitly make decisions for the investment asset and capital.
Investment custodians and/or brokers have the responsibility for access, risk awareness and allowance; this implies that institutional investors have to maintain the sophistication for crypto investments with no compromise and a centralized operation, as well as adequate personnel and provision for operational risk maintenance to secure the interest of all owners, and the institution’s direct investments in the crypto space.
With their roles explained (listen to the podcast for further details), it is relatively easy to understand that institutional investors are major players in the world finance market, and with the introduction of cryptocurrency to national economic activities, it is only expected that institutional investors will pursue active involvement in crypto investments. Crypto currencies are regarded as digital assets, and like most other assets (such as gold), they may depreciate or appreciate, depending on other forces which determine market exchange rates. Gold has a correlation to the core market that crypto currencies also have, making them assets for analysis based on the status of their correlate rates.