What to know:
You’re currently going through Crypto for Advisors, the weekly digest by CoinDesk, designed to break down digital currencies for financial consultants. Sign up now to receive it in your inbox each Thursday.
Today, I’m the one penning the Crypto for Advisors newsletter! Come along as we delve into the expansion of the cryptocurrency sector. Later, Kim Klemballa from CoinDesk Indices addresses frequently asked questions about pricing and benchmarking the asset class in our “Ask the Expert” segment.
Notice: Dive into the world of digital assets and discover methods to enter the crypto asset sector besides Bitcoin. Join Ric Edelman of DACFP, David LaValle of Grayscale Investments, and Andrew Baehr of CoinDesk Indices for an educational webinar on July 16 from 1-2 p.m. ET. This event will be held live only. CE credits are offered. Register now to learn more!
– Sarah Morton
Two Years In, and Just Getting Started
Two years ago, I assumed the editor position for Crypto Advisors at a critical juncture. It was smack dab in the middle of 2023, and the cryptocurrency sector found itself plunged into a severe winter. The downfall of significant lending platforms and the explosion of FTX had caused seismic tremors across the markets. The U.S. regulatory environment was unfriendly, characterized by aggressive enforcement measures, and trust was faltering.
Despite this, the underlying signs of something monumental were hard to overlook. Fast-forwarding to present times, we find ourselves on the brink of what Bank of America refers to as a “transformation every millennium.” They’re not referring to internet trends or rumors. Instead, they’re discussing the overhaul of global financial systems, economic structures, and digital assets ownership—and this revolution is fueled by cryptocurrencies.
An Ode to Bitcoin: The Genesis
Bank of America suggests that Bitcoin is on par with significant inventions like the printing press and artificial intelligence.
Bitcoin emerged following the 2008 financial crisis as an innovative creation – a decentralized, digitally-based currency with a predetermined supply. Unlike traditional currencies controlled by governments, corporations, or central authorities, it operates independently.
Subsequently, a wave of activity emerged. Pioneers discovered creative uses for GPUs among students, developers constructing digital wallets, business owners initiating trading platforms, and miners persistently seeking economical energy sources across the planet. In essence, a transformative technological and financial evolution unfolded.
Today, we’re witnessing Bitcoin Exchange Traded Funds (ETFs) from some of the world’s largest financial institutions, such as BlackRock, Fidelity, and Grayscale leading the pack in terms of Assets Under Management (AUM). Additionally, countries like the United States and UAE are actively embracing cryptocurrencies, striving to establish themselves as global leaders in the crypto sphere. This represents an unprecedented surge in financial innovation.
The Rise of Ethereum and Smart Contracts
Bitcoin ignited the flame, yet Ethereum, with its introduction of smart contracts, added practicality, programmability, and the potential to represent various assets such as real estate, carbon credits, artwork, identities, stocks, and even yield-producing systems.
Despite Bitcoin and Ethereum often stealing the limelight, there are actually numerous other digital assets in existence. Meanwhile, although investment opportunities tend to be the focus of attention, blockchain technology is subtly revolutionizing sectors such as supply chains, intellectual property, finance, and many others.
1) A significant number of publicly-traded companies are incorporating cryptocurrencies into their financial records, with over 140 such firms openly disclosing bitcoin holdings. Platforms like Coinbase, Kraken, and Robinhood are broadening their offerings to include tokenized stocks, while the variety of ways for individuals to invest in crypto is expanding rapidly. This includes direct-to-consumer platforms, exchange-traded funds (ETFs, now numbering in the hundreds), tokenized investment funds, and outright ownership. The trend shows no signs of slowing down.
The Landscape Has Changed — Are You Adopting?
A small number of consultants were among the first to adopt this approach initially, but this trend is gradually changing as more and more recognize the potential benefits – such as strengthening client relationships, safeguarding business, and even attracting new clients. It’s now quite common to hear that advisors are successfully acquiring clients simply by discussing Bitcoin with them.
On the contrary, a lack of regulation, strict company policies, unpredictable behavior of digital assets, and overall uncertainty surrounding this new asset class have led to hesitancy among many. To make matters more challenging, financial advisors are already juggling numerous responsibilities, and now they must also learn about and adapt to this ever-evolving asset class. However, clients express a desire for access to digital assets. A recent survey by Coinshares reveals that clients want their advisors to be well-informed about digital assets. Remarkably, over 80% of respondents said they would prefer an advisor who provides guidance on digital assets, and 78% of non-crypto investors indicated they would seek advice from an advisor if crypto support were provided. Interestingly, nearly 90% stated their intention to increase their investment in cryptocurrencies by 2025.
A Call to Action
Blockchain serves as a foundation, cryptocurrencies represent more than just investment categories, and this technology encompasses applications far beyond financial investments.
The field of blockchain technology is growing, regulations are becoming more sophisticated, and major global entities are adopting it at an increasing pace. As per recent remarks by U.S. Treasury Secretary Scott Bessent, “Cryptocurrency represents one of the most significant developments currently taking place worldwide.
Even if you’re not a cryptocurrency trader or blockchain programmer, being a fiduciary means you have a responsibility towards your clients to grasp the current developments. Learning is crucial.
Over the past two years, as I’ve managed this newsletter, I’ve observed a transformation in public opinion from initial skepticism to growing interest, and now towards strategic adoption of cryptocurrencies. We’re only at the beginning, and I couldn’t be more excited to embark on this crypto adventure with you! If you have any ideas for topics you’d like me to cover in future editions, feel free to reach out and share them with me.
– Sarah Morton, chief strategy officer, MeetAmi Innovations Inc.
Ask an Expert
Q. Why is the same digital asset priced differently on each exchange?
Traditional equities connect to an exchange where a single, unified price is established. In contrast, cryptocurrencies function in a decentralized manner, meaning there’s no central hub for pricing a digital asset. Instead, crypto prices are influenced by factors such as supply and demand but each trading platform determines its own prices independently, leading to potential differences in price between various exchanges.
Q. How can I find reliable pricing data for digital assets?
When searching for digital asset index and data providers, prioritize those that offer reliable pricing from established and trustworthy sources with a demonstrated history in digital assets. Additionally, consider providers who employ a clear and rules-based methodology for constructing their indices, as well as those who clearly define the criteria used to capture pricing data. The methodology of an index plays a crucial role in its accuracy and reliability. For instance, if an index’s selection criteria include “trading on more than one eligible exchange” where eligibility is carefully defined, then during events like the FTX collapse, tokens such as FTT (FTX’s exchange token) would be excluded from the index, thereby helping to avoid exposure to potential bad actors. A thoughtful construction process is key.
Q. Why are people using bitcoin to measure the entire digital asset landscape?
Currently, bitcoin makes up approximately 65% of the entire digital asset market; however, there have been instances where its share was under 40%. It’s essential to remember that one asset should not define an entire category. Diversification is crucial for institutional investors to handle volatility and seize a wider range of opportunities. An efficient benchmark must cater to various stakeholders—facilitating performance assessment, bolstering investment strategies, and establishing industry norms for all participants.
These indices, such as CoinDesk 5 (CD5), CoinDesk 20, CoinDesk 80, CoinDesk 100, and CoinDesk Memecoin, were specifically designed to cater to individuals interested in tracking, trading, or investing within the rapidly changing digital asset marketplace.
– Kim Klemballa, CoinDesk Indices
Keep Reading
- CoinDesk breaks down the June crypto markets and ETF/ETP flows. Brought to you by ETF Express and Trackinsight.
- Digital Assets: Quarterly Review and Outlook is now available! This report by CoinDesk includes a Q2 recap, Q3 outlook and dive into digital assets dominating headlines.
- Crypto Insights Group released, “Mapping Digital Assets in Institutional Portfolios.” This report meets you at the intersection of allocators, fund managers and data.
- VanEck CEO says more Americans have exposure to bitcoin than gold.
Kim Greenberg Klemballa contributed reporting.
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2025-07-10 19:16