BUSINESS MAVERICK OP-ED: Up. Down. Is there any remaining case for diversification into crypto assets? Surprisingly, there may be

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BUSINESS MAVERICK OP-ED: Up. Down. Is there any remaining case for diversification into crypto assets? Surprisingly, there may be By Ruan Jooste

Whether you buy into the hype is up to you, as it is still early days, but experts believe that the time to start betting on the value proposition, which is crypto assets is now, and the notion is backed up by a future industry that lies much deeper than the mining of a scarce digital commodity or the simple transmission of linked funds over the internet sans the supervision of an intermediary.

Hougan compares the imminent crossing of the next technological Rubicon to the launch of email in the early eighties. He says that in the first ten years only geeks and academics in technology centres like Silicon Valley used it. It was clunky and the interface was user unfriendly. Then we got Outlook, Yahoo and Hotmail and the platform expanded parabolically and changed the way we interacted with each other dramatically.

Bitwise did a study recently, which indicate that a 1% allocation to crypto increased total return on a portfolio by 5% without impacting volatility. Furthermore, a 5 % allocation doubled returns while reducing the maximum drawdown. In other words, even if crypto valuations are so volatile, because it is so counter-correlated it had lower drawdown rates despite having twice the returns.

DCX Capital is the brainchild of entrepreneur Loxton — an ex-banker – and former FNB CEO and venture capitalist Michael Jordaan and like Bitwise’s index – its first index – DCX10 -gives exposure to the world’s top 10 crypto assets, which makes up 85% of the world’s market capitalisation. An easy way to think of it is the S&P 500 of crypto.

 

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MichaelJordaan To think that just 18 months ago I was laughed at by the investment team who do our provident fund when I mentioned crypto. What could a digital creative possibly know about innovation in money?

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