In the upcoming years, the market for crypto asset management is expected to grow bigger. It is anticipated to grow to a $9.36 billion market by 2030. This expansion can be attributed to elements including the rise in cryptocurrency usage and investment as well as the stepped-up efforts to digitize the financial sector.
As a result of the growing accessibility of digital assets and their anticipated financial potential, distributed ledger technologies are also being adopted more widely. As a matter of fact, it is projected that cryptocurrency would bring in more than $11 billion in revenue by 2030. If you want to invest in digital assets, have a deeper understanding of a specific trading platform or investment fund, working with digital asset managers can help you get the most out of your investment.
What Is Crypto Asset Management?
Crypto asset management is the process by which businesses manage digital assets, such as tokens or crypto assets, on behalf of their clients. Despite having a solid strategy, you run the risk of suffering large losses if you don’t manage your funds well. You can optimize the worth and possible yield of your digital assets with the help of a crypto fund manager. You can track the performance of your cryptocurrency assets, diversify your portfolios, control risks, and obtain thorough reports with the manager’s assistance. Additionally, they can contribute to the accessibility of the cryptocurrency market through professionally managed digital asset solutions.
How Crypto Asset Management Works?
Managing your cryptocurrency assets usually includes using techniques like risk management, portfolio management, monitoring, and analysis. To manage your digital asset, your crypto asset manager can employ a range of solutions, such as safe storage platforms or reporting and analytics tools with integration capabilities. They can help you with tax planning and compliance in addition to managing your digital assets.
How Does Crypto Asset Management Differ From Traditional Investment Management?
While producing returns for investors is the same goal for both traditional and cryptocurrency asset management, there are several important differences between the two investment strategies. Let’s examine this.
1. Classifications of Assets
The asset class in which they invest is the primary distinction between traditional asset management and cryptocurrency asset management. In the traditional financial markets, securities such as equities, bonds, and real estate are often invested in by portfolio managers. Conversely, cryptocurrency asset managers make investments in virtual currencies like Ethereum (ETH) and Bitcoin (BTC).
2. Market Volatility
The majority of cryptocurrency assets are extremely volatile, meaning that over a little period of time, their values can fluctuate dramatically. Except for particular equities, you usually don’t witness such extreme volatility in traditional capital markets. Because of this, digital asset managers need to have effective risk management plans in place to handle the extreme market volatility.
3. Liquidity
Traditional asset managers that deal in assets like equities, commodities, and government bonds can usually purchase and sell in huge amounts with ease because these are extremely liquid markets. On the other hand, the crypto asset market is not as liquid. It can therefore be challenging to enter or quit a position without suffering significant price slippage. This is particularly true when trading in cryptocurrencies with mid- and small-capitalizations.
List of the 5 Best Crypto Asset Management Companies
Even for experienced investors, managing a digital asset like a cryptocurrency can be difficult. A crypto asset management company can assist you with portfolio management to better fulfill your financial goals, keeping an eye on the value of your crypto assets, and much more. They can also help you monitor and appraise your investments. The crypto asset management businesses on this list can assist you with diversifying your digital assets, advancing toward your objectives, and gaining a more thorough understanding of your digital assets so that you can make more educated decisions.
1. Multicoin Capital
Multicoin Capital is an investing firm that oversees a portfolio of liquid assets. It was founded in May 2017. In addition to managing cryptocurrency assets, the company makes investments in tokens, blockchain startups, and cryptocurrencies for new ventures, technological projects, infrastructure, and consumer and business applications. Currently, it looks after the long-term capital of high net worth individuals, family offices, and venture capital firms. Its portfolio consists of several assets and projects, such as Ethereum, Babel Finance, BetDEX, and Alpha Venture DAO. It is among the top cryptocurrency asset management firms in the world, with around $9 billion in assets under management.
2. Digital Currency Group
In 2012, the Digital Currency Group (DCG) started making investments in cryptocurrencies and blockchain companies. Since then, it has built up stakes in more than 25 countries, including more than 200 stock investments, more than 50 fund investments, and more than 30 token and digital asset holdings, including companies like Coinbase, Ledger, and Ripple. It provides a wide range of financial services, from supporting and growing distributed ledger companies to providing aid for the growth of blockchain companies. Its portfolio includes exchanges, BitGo, CoinDesk, Dapper Labs, Decentraland, eToro, and startups in the domains of non-fungible tokens (NFT), Web3 infrastructure, DeFi, and metaverse. It is currently one of the world’s leading asset management companies for cryptocurrencies, managing $50 billion in total assets under management.
3. Pantera
Pantera is an institutional asset manager that specializes in blockchain technology and was founded in 2003. In 2013, it began investing in digital assets and introduced the first cryptocurrency fund in the United States. It has established the first blockchain-focused venture fund. Venture stock, early-stage tokens, and liquid tokens are the three investment categories that Pantera now offers. Its portfolio includes early-stage token agreements and blockchain firms in the financial, infrastructure, and DeFi sectors, including BitGo, Coinbase, Ripple, and Zcash. Pantera claims to have $3.5 billion in AUM (Assets Under Management).
4. Polychain Capital
Founded in 2016, Polychain Capital is a cryptocurrency asset management and investment company that prioritizes funding early-stage startups and blockchain technologies. Olaf Carlson-Wee, Coinbase’s first employee, founded it. As a crypto hedge fund, it has backed IPFS, Cosmos, Polkadot, Ethereum (ether token), and other cryptocurrencies. Additionally, it has Simple Agreements for Future Tokens (SAFTs) investments.
5. Amber Group
Amber Group is a digital asset trading company that works with significant exchanges and applications to supply liquidity and to assist clients in creating, trading, and investing in a wide variety of digital assets. This digital asset business currently serves more than 1,000 institutional clients and has over $1 trillion in traded volume. Additionally, it has brought in $500 million for its international investors. With its headquarters located in Singapore, the company has expanded to Dubai, Hong Kong, Australia, and Japan. In addition to managing cryptocurrency assets and offering liquidity, Amber Group also engages in crypto mining and serves as a validator. It offers asset management services, including investing and trading in digital assets, among other things.
Conclusion
Crypto asset management companies can be a great choice for investors who want exposure to the cryptocurrency industry but do not want to invest directly in cryptocurrency assets. So if you are one of those who don’t want to invest directly in cryptocurrency assets, you can go for any of the crypto asset management companies mentioned in this article.
Related Topics
