How Can Advisors Create Exposure to Digital Assets
Since the advent of cryptocurrencies, professional asset managers have lacked a solution to gain access to digital assets for their clients. But times are changing.
Cryptocurrencies, or digital assets, are undergoing a change in nomenclature that is reflective of the financial community’s changing views toward them. Initially, they were nothing more than a medium of exchange that let buyers bypass the inefficiencies of mainstream monetary systems. Now it is evident that the technology these assets use, the blockchain, may be the next big financial innovation that revolutionizes modern economies. However one of the main limitations of this market is the absence of an asset management platform for financial advisors to allocate these assets into the portfolios of everyday clients. HeightZero aims to solve this problem.
Access to the Market: A Page from the History Books
In nineteenth century Scotland, an ambitious textile man named Robert Fleming found that there were incredible profits to be made selling jute fabrics to American manufacturers of sandbags during the American Civil War. After the war, he observed that there were an infinite number of equally profitable ventures in America and wanted to bring more investors from Britain to the table. The problem was simple – how does one create a platform where the investors of London and Edenborough can access information about the investment opportunities abroad (i.e. railroads, mining, textiles) and let clients make their own determinations about what they think will work and what they think will fail, and act accordingly?
What resulted was a model where the people who knew everything about the different investments would present a client with offerings, and the client could then decide which ones they liked best. Fleming and his associates were the very first financial advisors, creating a platform where the broad family of flowering new assets could be managed and traded with relative ease.
History Repeating Itself: Digital Asset Management Platform for Financial Advisors
Today the newly created broad family of assets is cryptocurrencies, and just like in the past, financial advisors will require a platform to manage them. The Englishmen of Fleming’s day needed lots of coaching and explanations about cotton harvest cycles in Virginia, and iron ore deposits in the Appalachians. Today's investors will require education on how cryptographic modification cycles are the key distinguishers between the various cryptocurrencies, and that the USD value of each one is highly subject to the arbitrage whims of the highly concentrated wealth pools. Elon Musk’s recent play of buying up Bitcoin, offering it as accepted payment for his cars, and then watching its price rise would be like Tomas Eddison buying up a bunch of the newly issued federal reserve bank notes in America, and then accepting them as payment for his light bulbs.
A Tool for the Modern Advisor
To help advisors and their clients succeed, HeightZero offers a turnkey solution that empowers the best decision making now, and into the future. Our digital asset platform is created by advisors, for advisors to bring the ideas and concepts of traditional investing to the crypto space. The result is a solution that is intuitive, scalable, and most importantly, compliant.
Please note, this article is intended for informational purposes only and should not be considered investment, tax or legal advice. Consult your investment, tax and legal teams for definitive guidance on any digital asset.