Mosoff suggested some “advisors are probably relaxing a little bit,” knowing that clients are less likely to be asking about investing in cryptocurrency “until the next cycle starts.” But he said that cycle will come, and advisors should use the crypto winter to educate themselves. “Anyone who is looking to play a role in the market - the advisor especially - requires a lot of diligence to stay on top of what is happening.” “The information is still flowing daily, with regard to FTX but with the overall market,” Tropeano said. What will follow over the next few years is “a thinning of the herd,” a flight to safety to the most established names, and more innovation. in Boston, said he expects global regulators to “be much harsher” on the crypto industry after the collapse of FTX. Mike Tropeano, senior director of wealth consulting with Broadridge Financial Solutions Inc. “Bitcoin and ether are both extremely risky and speculative, but the anemic outflows from Canadian crypto ETFs suggest their investors may be treating them like ‘moonshot’ long-term bets.” “It seems like the crypto ETF users in Canada are sticking to their allocations,” said Daniel Straus, director of ETF research and financial products research with NBFM, in an email to Investment Executive. 30, only $66 million of the decline was due to outflows, according to data from National Bank Financial Markets (NBFM). While crypto ETF assets under management dropped by $4.1 billion between Jan. Bitcoin and ether “still do exactly what they set out to do: the fundamentals are the same the value proposition is the same.” (See “Highs and lows,” below.)īrian Mosoff, CEO of Toronto-based Ether Capital Corp., also said bitcoin and ether will endure through this crash, even if some exchanges don’t. 24 webinar.Ĭharacterizing himself as “short-term bearish, long-term bullish” on cryptocurrency, Tapscott suggested that the Ontario Teachers’ Pension Plan Board and the Caisse de dépôt et placement du Québec exposed themselves to “huge concentration risk” by each investing in a single crypto firm rather taking positions in established cryptocurrencies. We just don’t how many or how big,” said Alex Tapscott, managing director of the digital asset group with Ninepoint Partners LP, during a Nov. He recommends allocating no more than 10% of a portfolio to cryptocurrency or crypto-related investments for risk-tolerant clients with at least a 10-year horizon, as part of their equity exposure.įTX’s bankruptcy has caused other crypto exchanges to suspend withdrawals, with some struggling to continue operating.Īnd “there are going to be more shoes to drop. “Just because one investment didn’t work doesn’t mean they’re going to stop there,” said Zagari, who suggests there will be “a lot of deals to be had” but believes the industry will remain volatile for the next 12–18 months. Institutional investors who believe in the transformative potential of blockchain technology are likely to “double down” on investments, said Michael Zagari, an investment advisor in Montreal with Burlington, Ont.-based Mandeville Private Client Inc. Horizons ETFs offers both long and short bitcoin funds. “That said, I don’t think the crypto ecosystem goes away,” Noble said, suggesting that blockchain innovations will continue during what could be a long “crypto winter” of little investor interest. The fallout from FTX’s collapse means “you’re looking at a number of years before you get broader public trust in cryptocurrencies,” said Mark Noble, executive vice-president of ETF strategy with Horizons ETFs Management (Canada) Inc. While the blockchain technology that underpins cryptocurrency is likely to offer investment opportunities in the future, the sector has no place today in the portfolios of the “vast majority” of clients, said Pyle, who has never recommended crypto investments. “ is highly speculative, highly volatile and it’s something you steer away from until we see signs of maturity in that sector,” said Andrew Pyle, investment advisor with CIBC Wood Gundy in Peterborough, Ont. Many crypto skeptics see the collapse of FTX as confirming their worst suspicions. in November, bitcoin and ether prices are now down by about 75% from their all-time highs a year earlier - and financial advisors and crypto experts are divided as to the industry’s fate. But following a series of failures in the industry, including the collapse of Bahamas-based FTX Trading Ltd.
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