When you hear the word cryptocurrency, do you immediately think “bitcoin”? You’re not alone. The cryptocurrency (crypto) world has evolved dramatically since an anonymous author(s), under the pseudonym Satoshi Nakamoto, penned a brief white paper in 2008 detailing the mechanics of what we’d soon come to know as bitcoin. While bitcoin is still the largest crypto by market capitalization, there are now some 6,000 in existence today.
For some, the crypto universe has evolved beyond its origins as a new payment technology and is instead viewed as an exciting investment opportunity. Bitcoin reached an all-time high of more than $61,000 on March 12, achieving a 300% annualized return over the last 10 years. Given this impressive return, it’s natural to see an increase in investor interest. However, in the short history of bitcoin, we have seen its price reach euphoric highs only to be followed by historic crashes. So, while it’s understandable that investors may be asking if “this time is different,” given the extreme volatility and uncertainty in determining appropriate valuations, we still view bitcoin and other cryptos as speculative investments and not suitable for all investors.
If that’s the case, what is this publication all about? Well, despite our views on crypto as a highly speculative investment, we believe the world of digital assets has reached a critical mass that gives us confidence that it’s more than just a passing fad. Therefore, our aim in this white paper is to help arm investors with knowledge of the crypto landscape and provide tools to evaluate the myriad crypto options.