Cinthia Murphy, senior investment strategist, discussed crypto investing this year with Calvin Tintle, senior manager of national accounts and distributions at CoinShares. The two talked about 2024 crypto performance and increased digital asset adoption at the Exchange conference earlier this year.
Cryptocurrencies took mainstage last year, garnering much investor attention and record inflows. The launch of spot bitcoin ETFs at the beginning of 2024 resulted in over $100 billion in flows to the category. Overall, the crypto market reached nearly $4 trillion in 2024. This included the surge in November in hopes of a friendlier regulatory environment under the incoming administration.
“The theme here is that it’s no longer nascent technology,” explained Tintle. “The conversation is now not so much what are cryptocurrencies, but why they’re important — why they fit into a portfolio.”
Crypto Education Fuels Increased Adoption
The growing popularity of cryptocurrencies means it’s a conversation advisors need to be comfortable having. Clients want to understand the benefits and risks of digital assets, how it fits into a portfolio, and how much to allocate to the asset class. As education continues on the crypto market, it will likely drive further adoption.
Cryptocurrencies, and bitcoin in particular, have a variety of use cases. One of the largest is the role of decentralized finance, or a financial system not tied to or beholden to any political entity. With the abrupt regime shift that is happening under the current U.S. administration’s shifting economic policy, a great deal of uncertainty has been injected into markets. Changes to global trade as the U.S. takes a nationalistic approach to economics resulted in dollar devaluation this year. Should the dollar continue to decline, bitcoin could prove an attractive alternative beyond traditional financial systems.
Bitcoin is also useful for cross-border payments and remittances, minimizing or eliminating many of the traditional fees. Furthermore, it’s increasingly seen as a store of value, the digital alternative to gold — albeit with pronounced volatility.
