Once viewed as speculative assets, cryptocurrencies are increasingly embracing mainstream acceptance. In Europe, WisdomTree emerges as a pivotal leader in driving this trend forward. The global financial services firm has introduced several exchange-traded products (ETPs) that facilitate diversification and simplify the process of acquiring and liquidating crypto assets.

Here, Dovile Silenskyte, WisdomTree’s Director of Digital Assets Research, shares insights on the evolution of cryptocurrencies as an asset class, the latest adoption trends, and the introduction of WisdomTree’s new ETP centered around the CoinDesk 20 index.

How do you see crypto becoming more akin to a traditional asset class? As with every asset class, diversification is crucial. Investors often diversify within equity and bond holdings; this should also apply when allocating funds in cryptocurrencies. Solely relying on Bitcoin is similar to holding just one stock in a portfolio, which is not an optimal strategy regarding risk-adjusted returns. A diversified approach across various digital assets enhances overall exposure to the sector’s growth.

As the digital asset class evolves, investors need benchmarks for performance measurement, trading, and investing. The CoinDesk 20 index acts as the benchmark for the crypto sector, functioning similarly to the S&P 500 for traditional assets. A diversified strategy through the CoinDesk 20 index provides a practical method to access opportunities throughout the digital asset market.

For those without in-depth crypto expertise, broader crypto indices offer a straightforward means to gain market exposure without dealing with the intricacies of individual token selection. Just as ETF investors utilize index-based funds for equity exposure, a diverse crypto index allows for systematic, passive engagement in the growth of digital assets.

What kind of adoption trends have you seen in the past? Are there geographical nuances you’ve observed? With over 15 years of development, numerous boom-and-bust cycles and over half a billion users, cryptocurrencies have firmly established their importance as a major asset class. Bitcoin and Ether have become fundamental elements in institutional portfolios.

Despite the long-term growth potential of cryptocurrencies, many investors remain cautious. With a total market capitalization of approximately 3 trillion dollars, the ecosystem and its applications continue to expand. The size of the crypto market rivals or exceeds traditional investments like high-yield bonds and emerging market small caps.

Crypto adoption isn’t uniform; it varies by region according to regulatory frameworks, institutional frameworks, and economic needs. Europe leads the charge with investors gaining exposure to Bitcoin ETPs for over five years and now having access to a variety of single-coin and crypto basket ETPs.

How is WisdomTree enabling this next phase of growth beyond Bitcoin? Since 2019, WisdomTree has provided crypto access through ETPs. Its range has expanded to include ETPs for five additional coins and four diversified basket products, including its latest ETP focused on the CoinDesk 20. WisdomTree’s crypto ETPs utilize institutional-grade storage solutions that guarantee high security levels, with several also offering staking yields. By integrating staking into crypto ETPs, investors access the growth of these networks while participating in their governance and security.

Tell us more about the WisdomTree Physical CoinDesk 20 ETP that you just launched. This strategy aids investors in avoiding the challenges of asset selection while aiming to provide secure and diversified exposure to about 90% of the crypto market by market cap, facilitating a democratic entry point into a historically challenging investment arena. Additionally, it aims to provide staking yield.

Where can someone get additional information? European investors can find more details regarding WisdomTree’s physically-backed crypto ETP range here.

Disclosure: This content is crafted by WisdomTree and its affiliates and should not be viewed as a forecast, research, or investment advice. It does not constitute a recommendation to buy or sell any securities or adopt any investment strategy. The opinions expressed are current as of production and may vary with changing conditions. The information contained herein is derived from both proprietary and non-proprietary sources. Hence, no guarantees of accuracy or reliability are provided, and no responsibility is accepted for any errors or omissions.