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Written by admin on 15. July 2023

Crypto Investing: Setting Boundaries with Active & Passive Strategies

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• This article discusses the key dilemma of crypto investing and how it is broken down into different models.
• Max Freccia from Truvius shares his perspectives on active vs. passive management and how these can be applied to cryptocurrency investing.
• Advisors need to consider investment percentages in light of forecasts such as those from British Standard Chartered Bank which have predicted a $120,000 BTC price by 2024.

Setting Boundaries: Defining Active and Passive Management for Crypto

Breaking Down The Key Dilemma in Crypto Investing

The cryptocurrency space is constantly evolving, with new tools being launched to help facilitate investing. These may include SMA platforms, portfolio tools, ETFs and more. In order to make sense of this array of options when deciding how to invest in crypto assets, we must first understand the two main types of management strategies: active and passive management.

Active vs Passive Management

Active management involves making decisions about which investments should be included in a portfolio based on research or other insights into their performance or potential future value. It requires monitoring the portfolios regularly and potentially adjusting them accordingly. On the other hand, passive management is a form of investment that follows predetermined rules without any human guidance or intervention; often relying on index-tracking funds that are designed to replicate an index’s performance without trading individual securities within it actively.

Pros & Cons Of Different Models

Buy-and-hold strategies are simple but may not offer much opportunity for capital appreciation if prices don’t move significantly over time; automated indices can provide diversification across multiple crypto assets while still allowing investors some control over their investments; while discretionary management offers more flexibility but requires greater involvement from investors in terms of research and monitoring their portfolios regularly for changes in market conditions or opportunities for profit taking. Each model has its own pros and cons which should be carefully considered when choosing an investment strategy for crypto assets.

Questions Spurred By The BlackRock ETF Application

In addition to understanding active vs passive approaches when investing in digital assets, advisors also need to consider what percentage they would like clients to hold as part of their overall portfolio allocation given recent predictions around future prices (e.g., British Standard Chartered Bank’s prediction that BTC will reach $120k by 2024). Furthermore, questions have been raised following the recent news that BlackRock has filed an application with the US Securities & Exchange Commission seeking permission to launch a Bitcoin exchange traded fund (ETF). If approved, this could represent a major milestone for institutional adoption of cryptocurrencies globally – opening up opportunities for advisors who want to advise their clients on digital asset allocations within their portfolios .

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