Crypto for Advisors: Crypto Volatility and Market Conditions

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During times of uncertainty, the increased availability and accessibility of an investor’s portfolio can lead to reduced volatility and panic across all asset classes, including crypto-native tokens.

from Raymond James Ltd. looks at institutional U.S. Securities and Exchange Commission filings and what they can tell advisors about adoption.On Monday, Aug. 5, the Japanese Nikkei plunged over 12%, marking its worst crash since 1987. This followed unsettling comments from Japan's central bank about potential interest rate hikes. Some attributed the decision to fears of a possible U.S. recession, while others linked it to speculation about Federal Reserve rate cuts.

Crypto markets consistently provide liquidity and availability, even in the most tumultuous times. On Aug. 5, several online brokerages, including Schwab, Fidelity, Robinhood and Vanguardto a “combination of higher volumes and a technical issue with a key vendor affecting systems,” which paints a picture of traditional finance’s opaque software and backend systems.

In Canada, SEDAR in Canada is similar to EDGAR in the USA. Both systems serve as electronic filing platforms for publicly traded companies to submit their financial and other regulatory documents. I tend to think of this like a permissionless and open ledger, similar to a blockchain network.This signifies a shift towards embracing digital assets as part of their investment strategy.

I do believe bitcoin is a long-duration, institutional-grade asset and can provide asymmetric return profiles that maintain significant upside potential while limiting downside risk.ETFs have become available in early 2024 and have become very popular with money flowing into them. Currently, total fund assets amount to around $62.3 billion held with the 10 spot bitcoin ETFs.

 

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