Virtually every aspect of our lives has become digitized. Thanks to the internet, access to everyday things — like books, music, newspapers, and more — are readily available at our fingertips. In the COVID-19 era especially, we have become more reliant on the internet to accomplish work and stay connected.
Twenty years ago, we never could have foreseen the important role the internet would play in our lives today. Now, it is almost impossible to imagine life without it and everything we would miss out on.
Bitcoin, the most predominant form of digital assets, is at that same early stage. As people become more comfortable with it and we head into the next digital gold rush, digital payments, like Venmo and Apple Pay, are becoming more widely adopted and accepted. The internet brought forth disruptive change — bitcoin is on track to have potentially the same, if not greater, impact.
While bitcoin and other cryptocurrencies are relatively new, usage is becoming more widespread — and even preferred — amongst individuals and institutions. As experts predict a shift in the financial sector, more investors are looking at alternative investments to mitigate risks in their portfolios.
And for good reason, too: the potential benefits of these kinds of digital assets are many. From anonymity to establishing credit for a wider global population, people are seeing the value of diversifying their portfolios with this type of asset. The ability to potentially hold their value (similar to gold), the decentralization from any one controlling body, and immutability have all contributed to the rapid rise in popularity. There is no denying that we are in the era of digital payment transactions. RIAs can add digital assets to their clients’ portfolios to diversify and potentially increase returns.
Some RIAs have struggled with a way to fundamentally analyze digital assets to determine the value for clients’ portfolios. We are working with them to navigate this new space and gain a better understanding of how to minimize the risks and maximize the rewards. John Gray, COO at TB Sunridge, believes this is only the beginning for bitcoin and will have greater potential down the road: “As we continue to shift to a digital future, it’s more important than ever for RIAs to understand the disruption digital assets will cause in our industry and how they have the potential to change clients’ portfolios for the better.”