Assuming blockchain technology adoption continues to expand at an exponential rate, we expect bitcoin to perform competitively in the years ahead relative to other asset classes.
With the growing number of cryptocurrency issues, we expect the majority will underperform bitcoin.
Identifying the most compelling cryptocurrency offerings requires understanding the relationship between the cryptocurrency trading environment and the evolving blockchain market. We believe that the following challenging dynamics of the past few years will continue:
- Continued friction between cryptocurrencies and global regulators will create opportunity for arbitrage, hedging and liquidity services.
- Mispricing will continue across exchanges and currencies;
- The news cycle will have short-term impacts on cryptocurrency volatility;
- As banks continue to intervene against the acquisition of cryptocurrencies for fear of threatening the existing paradigm, liquidity will come at a premium.