The crypto crash has important teachers for asset managers

The author is Chief Executive by Schroders

The drop in prices from Bitcoin will cause a satisfied smile for skeptics. You can congratulate yourself to have been correct at least for the time being.

You are right that excessive exuberance is a danger - history has made this clear several times. But the birth and growing popularity of cryptocurrencies throw up another point that needs to be taken into account: Does the investment industry fail to work for traditional investments? Do we overlook a trick?

According to Cypto.com, around 300 million people keep crypto-assets. And even after the sale this year, digital assets are still worth $ 1.1 trillion.

These dramatic numbers reflect the conversations that we experience every day, in pubs, in social media or in the Fund of Taxis. Many people have been inspired to buy in an uncertainty, unregulated, highly volatile new asset. This has proven to be catastrophic for some, especially for those who bought at the climax.

If crypto and digital assets can sell so well despite these obvious disadvantages, there are teachings from the phenomenon for asset managers.

Ironically, it is blockchain that is based on the technology that is based on cryptocurrencies that the catalyst for changes in the traditional investment industry. In fact, this is probably the reason why we have already exceeded the "Peak Fund". The signs are becoming increasingly clear that the market for investment funds will not grow larger than it is currently. The money is shifted to personalized portfolios, and this will only increase with the Ledger technology.

In the coming decades, new types of tailor -made investment products could become more common than the investment funds and open investment companies that are dominating today.

The blockchain technology will help enable access to exciting, more tangible assets. A new type of asset management company with comprehensive skills will make it easy to invest in the world around us. A shopping center, for example, could be dismembered and parts of it to be sold to local investors, perhaps to your own buyers.

The LEDGER technology of the blockchain would record ownership and effectively create a trading platform. Buying and selling is simple and transparent, and the asset is tangible. It could be mixed as part of a portfolio to ensure a certain diversification and achieve the best result for the investor.

grabbing is crucial, as is a connection to the underlying investments. The demand for disruptive technology shares during consecutive lockdowns showed this, as well as the popularity of crowdfunding over a longer period of time. Investors want to know the history of their investments and make sure they meet their own values. Above all, you want your portfolios to be personal for you. The use of blockchain technology can support this trip.

LEDGER technology offers us much more. Our traditional back office operations could experience transformative improvements. The transfer of ownership to assets with a single click is preferable to the currently required multi -stage, multi -day trading process, which is required, for example.

Investors should benefit from this wave of democratization. Assets that are once out of reach are token, easily accessible and affordable.

In the not too distant future, investors will probably keep more of their investments in their digital wallet than in funds. This could become a reality in my career.

The need for asset managers who actively manage plants will increase in this democratized world. The abundance of new investment options must be examined in order to evaluate your potential and your effects. Portfolios must be balanced and structured in order to achieve the goals of their owners.

The question is whether the industry can face this challenge. Not every company is ready for the trip and not everyone will do it. Those who are already bringing public and private markets together on their platforms are best set up.

The key is to build strong connections to those who have already immersed themselves in the world of cryptocurrencies. The crypto industry is located in a similar stage as the hedge fund industry 20 or 30 years ago. While it remains unruly, some platforms try to use extreme volatility to offer more predictable returns.

Many investors turned to crypto. Others have decided to finance companies that they believe in crowdfunding. The industry can meet this demand for personalization and a broad selection by incorporating blockchain and is open to the possibilities of how new asset classes can work in portfolios.

If we do not achieve this goal, even more investors are lured to the next wave of unorthodox and uncovered investments.