Remember when some fans of cryptocurrencies called them non-correlated assets? They were supposed to behave differently from the stock market, not affected by traditional economic, political and fundamental forces? Cryptocurrencies were also dubbed digital gold, in the expectation they would hold their value in inflationary times.

Neither has turned out to be the case. Bitcoin, the dominant cryptocurrency has fallen far more than the S&P 500 year to date, and in the face of higher inflation Bitcoin plummeted while gold has held its own.

Crypto advocates point out that Bitcoin has fallen by more than 50% eight times since its 2009 launch, and three times since 2018, and it’s recovered every time. And it’s been a top-performing asset class with better than 35% annualized returns over the last three and five-year periods and 80% annualized returns over ten years. In addition, an entire crypto industry has developed, which is expanding rapidly and being widely accepted by Wall Street, businesses, and some governments.

This week’s guest is a believer. He is Matt Hougan, Chief Investment Officer and former Global Head of Research at Bitwise Asset Management, a cryptocurrency asset manager founded in 2017.

I began the interview by asking Hougan about the role crypto assets play in a portfolio, considering they act like stocks.

WEALTHTRACK Episode #1852 broadcast on June 24, 2022

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MMATTHEW HOUGAN

Chief Investment Officer,
Bitwise Asset Management

ACTION POINT

USE A CUSTODIAN BANK FOR SIZABLE CRYPTO HOLDINGS

Custodian Banks:

Huge, reputable financial institutions such as Bank of NY Mellon, JP Morgan Chase, State Street, Citigroup
Store securities electronically & physically for financial firms, wealth management clients, institutional accounts & individuals
Cushion against market declines
Provide funds to invest