Crypto assets are getting more and more popular. Apart from its role in revolutionizing communications, the internet is the driving force in bringing investment online. That breaks down the barriers to information and execution for a large class of retail traders.
The subsequent deployment of trading applications brought enormous functionality to more investors, namely the ability to participate in financial markets with higher execution speeds and lower costs.
Since then, platforms such as eTrade and Interactive Brokers have popularized trading even further, making various asset classes, tools and education accessible to a large number of retail traders.
Better yet, the platform is multi-functional and provides liquidity from multiple exchanges and ECNs, adding to the advantages of online investing.
Crypto Asset Management
The next phase of evolution has reached an important milestone after UK-based robo-advisor and online wealth manager Nutmeg surpassed GBP 1 billion under managed funds last year.
However, this level of execution and centralized advice is less of a problem for crypto trading. Which faces many challenges that make it unattractive to less knowledgeable investors.
With today’s clear needs, crypto asset management tools are rapidly emerging to assist retail investors with their market exploration.
For the company behind this platform the incentives are clear: the crypto asset market cap is nearly US $400 billion, and it’s starting to show signs of stability.
A more mature market also means that less knowledgeable investors are more likely to dive in. That requires a shared platform that provides easier access compared to the fragmentation that currently defines the trading ecosystem.
Attractiveness of Simplified Crypto Management
The process of buying crypto assets is still more difficult than buying ordinary equity. Because crypto assets attract new users.
Currently, new traders must first find a wallet that accepts the cryptocurrency they wish to trade.
Then find an exchange that lists their preferred coin before completing a multi-faceted and lengthy verification process.
After entering the market, they have to spread across wallets and exchanges if they want to diversify their holdings.
While it can be done, the complexity of the process remains a huge barrier to entry for many would-be traders.
Several companies introduced a tool now commonly used in more traditional financial markets – asset management.
Instead of having to manage multiple accounts and wallets, crypto asset management platforms simplify the process by helping users consolidate holdings. And while providing better portfolio management tools.
There are already several funds offering crypto asset management and investing on behalf of customers. So far this model has shown strong results. With one company – Bitwise Asset Management – reporting a 51% return in less than 4 months after setting up a crypto-only fund.
With the soaring popularity of the asset class institutional investors have taken notice. Through research that shows that the number of crypto investment funds can double in 2018.
Even so, most traders in the ecosystem are still managing their own investments, and there are several platforms that have established themselves as tools, with new ones popping up every day.
Crypto Asset: New and Simple Horizons
In the end, the optimism and attractiveness of crypto assets will only be maintained if newcomers to the market can easily participate.
Crypto asset management tools offer traders of all skill levels a simpler and more centralized location to manage their investments. And thus a clearer pathway to enter the ecosystem.
As these platforms become more common and continue to defragment the environment of increasingly segmented crypto exchanges. Developing asset classes will continue to experience increased growth.
Even so their success depends not only on sending one location to track investments but as a hub to better understand the entire market.
The next frontier for asset management tools may be consolidation as platforms encounter their limitations. And also find partners who can enhance their value proposition.
By building and promoting this highly synergistic platform the crypto asset market will finally open itself up to wider participation from the entire online investment community.