With cryptocurrencies reaching new heights on a weekly basis, more advisors are seeking out opportunities to take advantage of this rapidly expanding new asset class. By launching the first structured multi crypto-asset fund in Canada, 3iQ
is trying to help advisors do just that.
“Digital assets enable portfolio managers, advisors and high-net-worth clients to get access to a completely new, non-correlated asset class,” says Fred Pye, 3iQ’s CEO. “The new economy of crypto-assets moves to its own beat and is not affected by any one country, industry, or play. It’s an absolutely ideal asset class to invest in but it can be difficult to access. The fund that we’ve created is designed to be a core holding.”
The fund - 3iQ Global Crypto Asset Fund - owns the three biggest cryptocurrencies: Bitcoin (40%), Ethereum (30%), and Litecoin (10%), and has a 20% allocation to external crypto funds based in the U.S.
“There are some amazing managers in the U.S., with diversified ICO portfolios and other token crypto assets, and we want to participate with those,” Pye says.
There are not many topics of conversation that split opinion quite like cryptocurrencies. JPMorgan Chase CEO Jamie Dimon recently called Bitcoin a fraud, saying that Bitcoin will never work. He even said that the currency is bound to crash. Reuters quoted Dimon as saying: "You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
Other leading firms have taken a completely opposite view. Fidelity Investments
, for example, has set up a dedicated Blockchain incubator to explore how it can build and launch cryptocurrency offerings of its own.
For Pye, the whole movement to digital assets is just the beginning, and he believes there is an “exceedingly high percentage” chance that the value of cryptocurrencies will continue to rise. Advisors simply must get informed on this rapidly evolving new asset class, says Pye.
“Crypto-assets is a new and real space with $150 billion in assets, so it’s essential for advisors to get educated,” he says. “It’s also their job to be prudent, skeptical and rational about these investments for their clients. We expect this to be the single largest technology change in our lifetime, and it’s a good time to participate and get involved. It’s better to get invovled at this stage in my view as opposed to experimenting further down the line.”
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