9th May 2022 > > WisdomTree.

tl;dr

EWisdomTree is convinced by cryptos.

Market Snap (at time of writing)

Market Wrap

The week starts again with the exact same themes – as treasuries sell-off so do risk assets.

The tried and tested model of portfolio diversification has been destroyed by the experiment of quantitative easing (QE). What carnage will be wrought upon us if central banks attempt quantitative tightening (QT)?

Curious Cryptos’ Commentary – WisdomTree

WisdomTree is a large player in the European exchange traded fund (ETF) space, for both traditional assets and cryptos.

In an interview with cryptonews.com Will Peck, Head of Digital Assets at WisdomTree has conveniently provided some very encouraging remarks:

“We’ve seen demand [for crypto-backed ETFs] being pretty consistently strong […] It shows that asset allocators are thinking about [crypto] like any other asset, trying to construct portfolios and allocating to it.”

It is true that he is hardly the definition of an unbiased observer, but he is working at the sharp end of institutional adoption of cryptos, and his views and opinions are of value to us.

“I think it’s very encouraging in terms of adoption in the institutional space – you’re seeing people not just trading momentum in the same way – the retail FOMO [fear or missing out] trade – but people are just saying ‘hey, this makes sense’ – whether it is 2, 5, 10 percent of my portfolio – I’m going to continue to allocate according to that.”

Will also agrees with the CCC on the unsuitability of a BTC ETF based on futures not spot, due to the effect of contango, and other associated costs of the roll.

…

WisdomTree is also due to launch its own crypto wallet later this year in the US with a global rollout planned for 2023.

The firm believes that there is a gap in the market between self-custodial wallets such as the Ledger Nano and the centralised accounts offered by exchanges like Coinbase and Binance.

Jason Guthrie, European head of digital asset product and head of digital assets explains:

“There's a big gap in terms of what's out there at the moment that enables people to come into this space.”

Self-custody wallets like Ledger are “fine if you're really into the technology and you're an early adopter or you're very computer savvy or literate. But that's not really a viable user experience for mainstream.”

Readers know of my evangelising of Ledger Nano for self-custody, but that does not mean that Jason is in the wrong. I am acutely aware that many people do not have the time, the patience, or indeed the inclination to get bogged down in crypto details. Jason recognises this too when he says:

“Two hundred million people use crypto today. These are the early adopters. I really care not about the 200 million that are in but the next 2 billion that come on — and how we help them connect to, and use, and benefit from this space.”

I am all for making the process of entering the crypto world as easy and as intuitive as possible.