Last week the event series "Crypto-Lunch" of our partner 10×10 took place. In this event series, which deals with different areas of the crypto world, experts took a closer look at the latest crypto developments.
The speakers offered an interesting contribution, as well as informative explanations about current events in the field of crypto-currencies. A special aspect was the way the event took place. Participants could decide whether they wanted to attend the crypto lunch physically in person or via Zoom. The theme of the event was: Crypto-Assets - the asset of the future?
More than a speculative object
Rino Borini - co-founder and CEO of Scarossa (operator of the 10×10.ch platform) - leads the event and starts his presentation with the question of which financial products are available on the market and what investors have to consider.
The speaker starts his own presentation with the news from Fidelity Investments. They are currently planning a Bitcoin Index Fund. According to him, the interest of one of the world's largest asset managers shows that crypto-currencies are probably more than just "speculative toys". He also quotes a Fidelity survey of institutional investors, according to which 36% have already invested in digital assets and 60% see space for them in their portfolio.
But not all crypto-currencies perform equally well and have the same benefits. Therefore he emphasizes that the majority of all crypto-currencies (according to CoinMarketCap nearly 7'000) are more or less useless. Exactly there lies the difficulty with investing: It is not that easy to find high-quality projects and to store your own coins safely.
According to Borini, however, there is now a wide range of products from the already established financial industry. This can be structured very similarly to the current financial industry, as more and more investors and fund managers from the traditional world are switching to the crypto-scene and contribute their knowledge.
ETPs, funds or structured products
The Swiss stock exchange in particular has taken a leading position in this area. The first Bitcoin ETP was launched here. Meanwhile, there are many other offerings for traditional investors, from crypto indices to ETPs of individual currencies and tracker certificates.
Bitcoin: Digital Gold
21Shares co-founder Hany Rashwan - an Egyptian who grew up in the USA - explains how he came into contact with the crypto world in the first place.
At the same time as he started supporting companies in Silicon Valley in 2011, Bitcoin was introduced to him for the first time. At that time his enthusiasm for crypto-currencies was limited. He saw advantages only for illegal business or transactions in countries like Venezuela, Somalia and North Korea.
But when a few years later his home country Egypt experienced a sudden currency devaluation of over 30%, Hany Rashwan gradually recognized the potential of a strictly limited, disinflationary currency. He was convinced that more and more people wanted to protect themselves from central bank devaluation with investments like Bitcoin. This led to the world's first Bitcoin ETP in Switzerland.
The presentation continues with a comparison of Bitcoin and the safe haven gold. The lecturer explains that the price of gold has been subject to strong price fluctuations for about 15 years after the decoupling of the US dollar from 1971. Although gold investors were considered crazy at that time, gold is now without doubt a safe investment.
According to Rashwan, many people agree that Bitcoin is slowly becoming a safe haven, mainly because of the superiority of many properties (compared to gold). In his opinion, the most important of these are: scarcity, divisibility, verifiability and transferability. The only advantage of gold over Bitcoin, according to him, is that it's shiny. Gold jewelry simply looks much better and we can actually touch it.
Gold is good. Bitcoin is better.
The total amount of Bitcoin is strictly limited to 21 million, it is easily divisible, sending it around the world is no problem and counterfeiting is practically impossible. In all these aspects, gold is not bad, but Bitcoin is simply superior: The total amount of gold is scarce but not clearly defined, it can only be divided to a certain extent, has been forged time and time again and is very difficult to transport.
Bitcoin is therefore not a revolution, but rather an evolution of gold. And since it can be described as a better, digital version of gold, the younger generations are particularly interested in it.
Integration into a Multi-Asset Portfolio
Sina Meier - also from 21Shares - addresses the issue of why crypto-assets should be integrated into a Multi Asset Portfolio.
She gives three main reasons for this. As the first reason, the speaker lists the functionality of Bitcoin as a "safe haven". Even before the Corona crisis, the increasing high debt of our banks was no secret. The current crisis has by no means improved this situation. Bitcoin, however, could be used as a modern, long-term investment as protection against inflation.
The second reason, the uncorrelated returns and the diversification given by Bitcoin, is also discussed. The correlation, which is generally high for global bonds as well as stock markets, increases further in times of crisis. Crypto-currencies, however, are independent of traditional stock markets and can therefore also be used as diversification.
The third point that Sina Meier mentions is the yield. Through strong price fluctuations of crypto-currencies it's possible to earn high profits, but obviously there can also be high losses.
Sina Meier again shows an overview of the products of 21 shares. 21 Shares has 11 different ETPs , the currencies Swiss Franc, US Dollar, Euro and British Pound are part of 5 different products.
Sina Meier also explains that 21 Shares invests a considerable amount of commitment and time in further training. Webinars are offered regularly, and especially women are welcome. They are still strongly underrepresented in the financial sector as well as in the crypto sector. There is no requirement of expert knowledge, but a certain know-how is desirable.
An app to counteract time consuming processes
Julian Liniger, CEO and co-founder of the start-up company "Relai" tells his company's story and explains the reasons why for him the release of this Swiss Bitcoin App was so essential.
Investing in Bitcoin is still a complicated and costly matter for the masses. The Swiss Bitcoin App "Relai", which claims to be the simplest in the world, tries to change that and finally give everyone access to the mother of all crypto-currencies.
The idea of his startup began with the problems of the current financial system. Julian Liniger addresses the excessive money printing of banks and the resulting higher inflation. He also addresses the negative interest rate and the high, non-transparent bank fees. To fight against inflation, the question of the best investment arises. In former times - Liniger says - these were gold, stocks, real estate and now also Bitcoin. Compared with other asset classes, Bitcoin is unquestionably the best performing asset.
The advantages of crypto-currencies attract investors. Unfortunately, the process of buying and selling crypto-currencies is complicated and time-consuming. Julian Liniger, therefore, hoped for a so-called "One-Click-Solution" to enable Bitcoin investments. Relai as a Bitcoin investment app shall avoid the difficulty of buying and selling Bitcoins. The special feature of the app is its mobile version and speed. The creation of an account or registration is not necessary to purchase Bitcoins through the app. Relai already enjoys great popularity.
