In mid-June, Bitcoin and Ethereum prices dropped more than 70% since the peak of last year’s bull run, decimating confidence among investors. However, the crypto megatrend is irreversible: the demand for asset management is expected to grow even stronger. Increasing commodity prices and rate hikes are shifting market expectations, and the pressure on the price of Bitcoin appears to have opened the possibility for a sustainable rally. Investors feel underinvested.
Winter is Over
"When you look at historical data, it has reached the expected low," according to Markus Thielen, Chief Investment Officer of IDEG, who turned "bullish" on the crypto market in IDEG's latest research report. "The headwinds from inflation, interest rate hikes, Bitcoin miners' liquidations, protocols' insolvencies, crypto investment funds closing and all other negative factors, would come to an end", says Markus.
1) Macro Economy
Inflation expectations and rate hike probabilities appear to peak out. As expected, this has caused a significant rally in risk assets.
2) Protocols' Insolvencies
The long-awaited and delayed "ETH merge" set for 19 Sept, 2022 provides better risk-adjusted opportunities to enter at the perceived lows.
3) Bitcoin Halving Cycle
Based on the previous two Bitcoin halving cycles, a decline from the two-year price level ahead of the halving and/or an expected low 18 months ahead of the next halving was an opportune level to buy.
While it feels this time represents a good entry point, digital assets will continue to be a volatile asset class.
Seize the TIMES
Mark Twain is credited for saying that "History doesn't repeat itself, but it often rhymes." Trusted digital asset managers believe in "investing with odds in your favour" and applying appropriate risk management. There is now arguably an attractive risk/reward opportunity for being exposed to crypto and its upside.
Given crypto's history of volatility, investors will require help from credible asset managers with the appropriate people, global footprint and crypto-native infrastructure to help secure their financial lifelines and enhance their return.
This is where a professional crypto asset manager can help. Founded in 2019, IDEG is a service-oriented digital asset manager providing comprehensive, customizable, digital-native asset management services and solutions for institutional clients. Pioneering a multi-strategy thematic product shelf, IDEG now has over 15 digital asset management products. Its T-I-M-E-S series products allow accredited investors to access digital asset market opportunities with varying risk exposure.
IDEG also provides access to its strategies via offshore pooled vehicles, with appropriate levels of custody, in addition to non-custodial services, including wallet management trading services for selected institutional clients.
"T" stands for "Tracking". IDEG actively tracks single-and baskets of multi-digital assets aiming for digital asset exposures enhanced returns.
"I" stands for "Interest". IDEG offers market risk neutral strategies, with stable and enhanced income sourced from the wider digital asset market.
"M" stands for "Mining". IDEG’s structured Mining strategies grant direct access to the blockchain and web 3.0 mining infrastructure business, without the need to involve in any administrative or operational issues.
"E" stands for "Emerging". IDEG's Emerging strategy provides investors with access to multi-dimensional risk and return opportunities which are both technically and market complex, providing outlier frontier opportunities that are not usually accessible to non-dedicated digital asset investors.
"S" stands for "Structured". IDEG offers flexible strategies to accommodate an appetite for varying risk tolerances and commensurate return expectations.
All about Risk-Control
The most important aspect of asset management is risk-control and this is not an exception for crypto investments. Crypto asset management companies control risk through product diversity while ensuring full regulatory compliance. IDEG has attained appropriate licensing in recognised jurisdictions, seeking to provide comfort to clients with respect to high quality services and products.
IDEG values the importance of obtaining licenses from recognised jurisdictions across the globe, as appropriate compliance standards provide comfort and assurance to institutional investors. IDEG is an approved investment manager in both BVI and Cayman Islands. In addition, for the purpose of enabling greater flexiblity of access to clients, one of IDEG subsidiaries is registered as a trust company, whereas another is licensed by the Hong Kong Securities and Futures Commission to conduct type 1, 4 and 9 regulated activities.
As the market has a "positive upside catalyst" to run with, IDEG has switched strategies from "Neutral", allocation recommendations (Market Neutral Quant Arb, Interest Income through Stablecoins, directional indifferent CTA and Event strategies), to "Bullish" (smart beta, multi-token tracking, yield enhancement allocations or even mining exposure) with more market exposure.
If you want to partner with a professional with their finger on the pulse, email [email protected] to sign up for the Cryptoverse weekly newsletter, or visit IDEG's website https://ideg.com/ for more information about IDEG's strategies and investment philosophy.
This post is commissioned by IDEG/CTH and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.
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