The world of cryptocurrencies is relatively new for most investors, which leads to many questions and uncertainties regarding this new world of investments.
To break down exactly what's going on with two of the most popular cryptocurrencies, Bitcoin and Ethereum, we were joined by Paul Cappelli, Portfolio Manager at Galaxy Digital Management LP, on the latest episode of the Wealth Wisdom Podcast.
In this episode we discuss:
- What exactly are these assets?
- What are their ESG concerns?
- Have investors missed out on Bitcoin and Ethereum's growth?
- What are the new CI Bitcoin and Ethereum Funds all about?
- How much exposure should investors have?
You can listen to the podcast through these popular avenues.
Or, you can view the the podcast on YouTube.
Why Bitcoin and Ethereum are “disrupters”
Some may just look at Ethereum as just a flashy, speculative cryptocurrency asset, but the origin behind the Ethereum blockchain goes far beyond that.
Paul begins the episode by talking about what exactly Bitcoin and Ethereum are, mentioning that they are both “disrupters to existing systems.”
In this analogy, Bitcoin is a disrupter to the state of money, with Paul describing it as “a call option on the banking industry.”
Ethereum is also a disruptive force, with the idea that this blockchain could become the foundation for a decentralized internet (as opposed our current system, where major players on the internet such as Google, Facebook and Amazon work in a centralized manner, constantly mining our data).
Here’s more from Paul about how Ethereum aims to be disruptive – and beneficial – for the future of the internet.
Should you be concerned about Bitcoin and Ethereum’s environmental impact?
While Bitcoin and Ethereum absolutely nail the Social and Governance aspects of ESG due to their presence as a disruptor, it’s their environmental impact, or the “E,” that tends to get them bad press.
However, according to Paul, some of these narratives have been mischaracterized.
He mentions on the podcast that about 75% of the energy sources that are used to mine digital assets, come from renewable sources. That number is backed up by this study from the University of Cambridge, which states that 76% of cryptocurrency miners use electricity from renewable sources. That’s up from 60% in 2018.
On Ethereum’s website, they also admit that they want to combat their power usage, and they recently laid out a plan to decrease that consumption.
To hear more about Paul’s thoughts on the ESG concerns of Bitcoin and Ethereum, check out this clip.
Have you missed out on Bitcoin & Ethereum?
After seeing the explosive growth of these two assets over the past 12-24 months, it’s fair to wonder if you’ve missed out on their growth.
In the clip below, Paul talks about two reasons why Bitcoin and Ethereum likely aren’t near their peak yet.
How CI and Galaxy are making it easier to invest in cryptocurrency
One of the biggest hurdles for investors in years past was that sinking capital into cryptocurrencies such as Bitcoin involved a bit of work. Whether it was through cold storage, or “wallets” where you need a private key to access, these investments often required more work.
That was one of the reasons why CI Investments and Galaxy Digital teamed up within the last year to release both the CI Bitcoin and CI Ethereum Mutual Funds.
With these funds, you, the investor, get exposure to these asset classes without the traditional headaches of having to store cryptocurrency.
Paul talks a bit more about how these work in the clip below.
Next Guest
We touched on ESG a bit in this episode, but this is another fascinating subject that’s often misunderstood by investors.
To clear up some of the confusion on this, we will chat with Jeff Chan, Responsible Investment Analyst for CI Investments, on the next episode of the Wealth Wisdom Podcast.
If you have any questions for Jeff, or any questions after listening to Paul, please let us know by emailing sanafamilyoffice@assante.com.
Until Next Time,
Assante Sana
John Lawson
