While a lot of institutional and retail investors who finally started investing in crypto in the last two years have been hurt by the current market, Albrecht is not declaring it dead, but cautioning advisors about investing in cryptocurrencies that aren’t backed by anything, some of whose assets have already been wiped out. He still believes Blockchain has a lot of long-term potential and Ethereum has a lot of staying power because there is still some interest in a decentralized currency.
While he noted that we could still get a bounce with crypto as the markets improve, he said, “If things have imploded due to a withdrawal of stimulus, then I think cryptocurrencies will probably continue to struggle because they are very much a recipient of a lot of that stimulus – all the stimulus checks and folks sitting at home looking for something to do who got into crypto.”
He recommended advisors keep investments to a very small proportion of portfolios and also invest in the more secure cryptocurrency Blockchain ecosystem rather than any particular cryptocurrency.
“This is a more diversified way to play the space,” said Albrecht, noting that Horizons ETFs offers several ways to invest in it, including two funds more directly tied to the price of Bitcoin plus the Horizons Big Data and Hardware Index. It’s a broader-based fund with some exposure to Bitcoin as and the blockchain ecosystem, including Bitcoin investment banking and exchanges and big data, storage, storage, digital, and semiconductor companies. Despite the current markets, the three-year-old fund still has about $10 million.
Although Horizons ETF’s inverse Bitcoin fund has done well, Albrecht also recommended that advisors begin to trim some of it “because we don’t recommend these kinds of products as long-term holdings. My advice would be to take some of those profits because these are very volatile markets, and they can turn back the other way.”
