Crypto Future

Crypto is something I still do not understand and given that the first rule of investing is never to do anything you don't understand, I won't touch crypto with a ten foot pole.  This seems particularly wise given the enormous bath the commodity has recently taken.  However, for those of you who are interested, this week's edition of the PBS program WealthTrack provides an update on the current status of cryptocurrency.  Enjoy.  And hope everyone enjoyed their weekend.  

June 23, 2022

Dear WEALTHTRACK Subscriber,

Remember when some fans of cryptocurrencies called them non-correlated assets? They were supposed to behave differently from the stock market, not affected by traditional economic, political and fundamental forces? Cryptocurrencies were also dubbed digital gold, in the expectation they would hold their value in inflationary times. 

Neither has turned out to be the case. Bitcoin, the dominant cryptocurrency has fallen far more than the S&P 500 year to date, and in the face of higher inflation Bitcoin plummeted while gold has held its own.

Does that mean crypto should be dismissed as just another high-risk, overpriced asset with no inherent value, kind of like some of the dot com busts? 

Not quite. Crypto advocates point out that Bitcoin has fallen by more than 50% eight times since its 2009 launch, and three times since 2018, and it’s recovered every time. And it’s been a top performing asset class with better than 35% annualized returns over the last three and five year periods and 80% annualized returns over ten years. In addition an entire crypto industry has developed, which is expanding rapidly and being widely accepted by Wall Street, business and some governments. 

This week’s guest is a believer. He is Matt Hougan, Chief Investment Officer and former Global Head of Research at Bitwise Asset Management, a cryptocurrency asset manager founded in 2017. Bitwise has created several crypto indexes and launched the world’s first and largest cryptocurrency index fund, the Bitwise 10 Crypto Index Fund (BITW) which holds the 10 largest crypto assets weighted by market capitalization.  

I began the interview by asking Hougan about the role crypto assets play in a portfolio, considering they act like stocks. 

In this week’s EXTRA feature, Hougan explains why NFTs (non-fungible tokens) are a big idea with a big future. I’m intrigued!

If you miss the show on public television, you can watch it on our website over the weekend. You can also find the WEALTHTRACK podcast on Stitcher and SoundCloud as well as iTunes and Spotify.

Have a super weekend, and make the week ahead a healthy, profitable and productive one.

Best regards,

Consuelo