It’s been three years since the big Bitcoin crash that followed a 2017 cryptocurrency rush. Nowadays, some Bitcoin fans believe that this has matured as an investment vehicle.
A Bitcoin is a store of value made up of zeros and ones that hit an all-time high of almost $ 42,000 a week ago today. With the rise of this “digital asset,” as Bitcoin or Ethereum are called, some people with deeper pockets have turned to their investment advisors and wondered if they might be able to put some of it into their stocks, bonds and gold sprinkle.
“There was quite a lot of demand,” said Joel Revill of the Two Ocean Trust investment firm, which moved into its Wyoming base and has now received legal and regulatory approval to add digital assets to portfolios.
There are a lot of cryptos out there, but at the moment, Bitcoin is the star. Revill sees two groups wanting this stuff in their mix, starting with the bitcoin superfans who have been following its development all along.
That is the “crypto-native investor, someone who is aware of the unique properties of Bitcoin and has created their wealth by investing in Bitcoin but hasn’t really given much thought to traditional wealth or estate management or tax planning,” Revill said.
Beyond these people, there are now only wealthy investors or the outfits that represent wealthy families “who are intrigued by the asset class are delving into this for the first time, but they come with expectations that they will have them The same legal safeguards, regulatory clarity and trade execution and reporting that you expect when investing in traditional assets, ”said Revill.
Individuals can only order bitcoin if they have the money. However, financial advisors and professional money managers have generally been unable to add bitcoin to the portfolios they manage. It has to do with a 1940s law and third party administrators.
“What we haven’t seen is some kind of mainstream acceptance by the banks and broker-dealers as their regulators have no clarity so far,” Revill said.
But here’s the thing: Wyoming is looking to attract this type of business and has now passed a number of laws governing how Bitcoin-style digital assets are handled. The regulators there, Revill said, are also on board.
“Our Two Ocean Trust company is based in Wyoming, and we recently received a letter from our regulatory agency that allowed us to hold both traditional and digital assets in a qualified custody,” said Revill. “It was the first of its kind to be issued by a banking regulator.”
At the national level, the Securities and Exchange Commission is also considering ways to clarify these rules. Feedback has been sought from financial professionals over the past few weeks.
That’s the news, but why shouldn’t tech-savvy investors care about Bitcoin in the first place? First, if inflation should rise from the dead by definition, the value of traditional money will, by definition, fall. This is Bitcoin as an inflation hedge.
Also, not much more Bitcoin is naturally created, and this limited supply could increase the price. After all, according to Revill, Bitcoin is also useful in new financial technologies.
“Think of it as a replacement for global payment and settlement systems,” Revill said. “There are many significant advantages.”
That is, if the global laws and regulations that govern this world of digital assets allow it or if another technology does not replace it.
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