Financial Advisor
November 22, 2021
By AXIA

Cryptocurrency Advocates See Signs Of Wide Acceptance

Cryptocurrency is showing signs that it is being accepted as a real-world currency rather than just a mere investment, according to the founder of AXIA Coin.

“The question is: Is there a usefulness to cryptocurrency so that it becomes actual technologically based currency that people can use” to get paid and to buy things?" asked Nick Agar, founder and CEO of AXIA Coin, a digital currency network. “Is it something I can see people using or is it just an investment?”

The answer is that cryptocurrency has real uses, Agar said in a recent interview. “Advisors have to do their research to determine which investments have value, just as they do every time a new investment option or strategy is unveiled," he said.

Agar’s optimism about the staying-power of cryptocurrency is backed up by a recent survey and by the actions of some of the largest corporations. AT&T, Microsoft, Burger King, Starbucks and Subway are among those that now accept cryptocurrency as payment. New York City Mayor-Elect Eric Adams has announced plans to take his first three paychecks in bitcoin

According to a recent study by the deVere Group, a financial advisory, asset management and fintech organization, one-third of millennials and half of Generation Z would be happy to receive 50% of their salary in bitcoin or other cryptocurrencies. The study included 750 people under the age of 42 located throughout the world.

“Younger generations are embracing cryptocurrencies largely because they are ‘digital natives,’ Niel Green, deVere Group CEO and founder, said in a statement. “They have been influenced by the enormous surge in tech as they came into adulthood. They are comfortable using and see the value in and massive potential of digital currencies.

“They appear to trust an autonomous decentralized digital currency and payment system over a traditional system where legacy financial institutions and governments are in control,” he added. “They clearly believe that crypto is the inevitable future of money. And I agree with them.”

Some of the things that need to occur for cryptocurrencies and the networks they work on to be accepted by the public are happening, Agar said. For one thing, the systems are becoming more transparent. However, “cryptocurrencies were created to be a medium of exchange, and to a large extent they are still being used strictly for investment," he said. "The volatility in the niche market is happening because there is very little behind it to support it. People are investing in it based on perception.”

In order for advisors to help guide clients, they need to examine the technology behind the coins and networks, Agar said. For instance, the network on which the cryptocurrencies run need to be looked at first. Some of the most popular ones have deficiencies. But, the networks and the cryptocurrencies themselves present opportunities for advisors and investors who can make informed decisions, he added.

Karan Sood, portfolio manager of the bitcoin futures mutual fund at Cboe Vest, an investment company based in Tysons Corner, Va., said in a recent interview, that as cryptocurrency is coming into its own as an investment, it is being traded on a regulated exchanges and is subject to laws that require it be traded at competitive bid/risk spreads, which provides more investor protection. Cryptocurrencies can be part of a brokerage or retirement account and should be part of a well-diversified portfolio, Sood said.

Advisors and investors need to decide how much cryptocurrency in a portfolio is suitable, he said. “If you have 10% of a portfolio in cryptocurrency, you may have a risk and volatility problem; but if you have only 1% in cryptocurrency, it is not adding much in returns.” Sood said. “But the things we take for granted for mainstream investments are now available in cryptocurrencies.”

They all agreed more education is necessary for both advisors and investors since different cryptocurrencies and the networks they run on present varying opportunities and risks. Miami-based Eaglebrook Advisors, a tech-driven investment manager that provides a separately managed account platform for cryptocurrencies, has launched Eaglebrook IQ, a crypto educational platform for financial advisors. The platform provides training and education for Eaglebrook advisors on the digital asset market.

“We strongly believe that financial advisors need to be educated on the crypto market before investments are made in the asset class. Eaglebrook IQ will educate financial advisors and through them, their clients, on the emerging digital asset class,” Christopher King, CEO of Eaglebrook Advisors, said in a statement.


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