On this episode of the Wiser Roundtable Podcast, Casey Smith is joined by Robert Swarthout to talk about WisdomTree’s new cryptocurrency index.
In the last month, Bitcoin, Ethereum, and SRP have been down. Overall the crypto market cap has been down. In early December, there was about a 20% drop in 24 hours overall in digital currency. Casey and Robert have observed that bear markets in crypto have been longer and Bull markets have been shorter.
Blockchain is the overall term with subcategories. Proof of work represents a lot of computer power used to do math. Bitcoin was the first and Ethereum is another type. Proof of stake means that you literally own x number of the digital asset, and you hold it in a wallet. When we talk about a car title being on the block chain, this would be on an NFT network.
The market is demanding a Bitcoin ETF but continually gets denied. When it does happen, there will probably be a lot of investors wanting to get in on it. There is a futures ETF, but it's not exactly the exposure you want.
Josh Brown at Ritholtz got together with WisdomTree to create this index. It’s powered by this company called OnRamp. In this platform, you can trade crypto with financial advisors. They span layer one (Bitcoin, Ethereum), layer two (applications), and oracle networks (networks that take data from the outside world into a tradable asset), crypto indexing services, DeFi (finance like things that are not controlled by a company), and the metaverse (buying virtual land).
It captures approximately 64% of crypto market cap. Right now the weighting is 36% Bitcoin, 20% Ether, and 4% of the selected 11 other crypto assets. Within the 11 other crypto assets there is Tera (layer 1), Uniswap (DeFi), chain link (oracle), Polygon (layer 2), decentral land (layer two), phantom (layer two), the graph (indexing), AAVE (metaverse), and a few others.
Casey and Robert aren’t sure yet. They are still studying it as fiduciaries. In the meantime, if you want to dabble with it, only put 1% of your total assets in it. It shoots up and shoots down, so it's not something that advisors can throw into a portfolio yet.
0:45 Market Recap
5:48 Different Kinds of Blockchain
11:10 Bitcoin ETF
22:33 The Index Continued
28:56 Does this belong in client portfolios?
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