On day # 2 of Decentralizing experts discuss the value of having cryptocurrencies like Bitcoin in your investment portfolio, the challenges ahead and more.
On the second day of DescentralizAR, an event dedicated to the world of cryptocurrencies in Argentina, we were able to see the panel “Cryptocurrencies in your investment portfolio”. In case you could not witness it, we bring you the most relevant. What do you think of Bitcoin?
The panelists on this occasion were Brian Prilick (Managing Director at CTF Capital), Ignacio Plaza (Argentine Chamber of Fintech) and José Ignacio Trajtenberg (CEO Xcapit). The event was moderated by Hanna Schiuma (Biz Dev, Women in Fintech).
Why have cryptocurrencies in your investment portfolio?
All the panelists agreed that having cryptocurrencies in your investment portfolio is positive, however they stressed that it is obviously not for everyone.
At first, Ignacio Plaza stressed that “it depends on the profile of the person and the objective they have in their portfolio.” Plaza established that the most important question when considering BTC, for example, is “Do I want to expose myself to this sector?”
Next, José Ignacio Trajtenberg commented that this depends on the risk-return relationship that the investor manages. However, he emphasized the value of cryptocurrencies saying that it is conservative to have only 1% of your crypto investment portfolio.
Trajtenberg took the opportunity to recognize that the objective is to neutralize the fears and uncertainty of the crypto and BTC market. “We are clear that many people are afraid to invest in crypto because of volatility,” he said.
Then, he stressed that from the company in which he works they seek to create trust in capital and custody. Ultimately what is sought is to bring and democratize a simple investment tool.
Schiuma reopened the debate by asking how true this claim of correlation was between cryptocurrencies and traditional financial markets. This has been reinforced in 2020 after March, Black Thursday and COVID-19 (especially in the case of BTC).
Is there a correlation between Bitcoin or cryptocurrencies with the traditional financial asset market?
The first to respond was Plaza, who assured the following: “We have the super fixed monetary policy of BTC, and that of the super adaptive central banks at this time of COVID-19”, referring to the monetary policy of many central banks in the world.
Also, this investor mentioned that, “All nascent things are volatile, I believe that crypto is going to change the world. We don’t just support him as investors. ” However, he contrasted his views saying that you have to be careful with leveraged positions in assets like BTC.
Regarding the correlation, Plaza highlighted that “this happens in a small market in which many currencies are correlated with each other. That is because of the preeminence of BTC in this regard ”. Then, when talking about correlation with other assets, he said that it was best to understand it from a long-term perspective.
“If you follow the value of BTC or the cryptocurrency you choose minute by minute, you are missing the forest. This is a future asset, and it must be understood from the potential of the asset, ”said Plaza.
To this we can add Brian Prilick’s opinion. “BTC was born as an experiment. It seems to me that there have been events that have shown us that market modulation is not ready to come out of that correlation with traditional markets. ”
In this sense, he highlighted that an example was what happened in March with the famous Black Thursday. “With COVID, not even Bitcoin was spared.” However, he made sure to highlight his optimism for the future. “On the one hand it is still small, but it continues to grow. He still lacks, but he is on his way to that, ”he said.
The pending challenges for more people to invest in cryptocurrencies and BTC
Already in the final part of the panel, experts shared their expectations about the future of Bitcoin and cryptocurrencies.
Prilick commented that what is missing is that the user experience is better. “There is still a need for a better user experience, it is still difficult to operate with cryptocurrencies. In order to generate massiveness and to be able to scale the technology, I think that user friendly customers need to come out ”, he commented.
Next, Plaza highlighted that “An extremely secure system is not very user friendly. Doing it user-friendly makes security drop. That is one of the key challenges in terms of adoption. ” That is, reconciling security with a better user experience is still pending for developers within this industry.
Finally, José Ignacio stressed that “There is also a lack of education, and we have that role of educating, disseminating and identifying what the end user is interested in.” Then he commented that what seduces him about cryptocurrencies is the underlying: freedom, security, etc. In his opinion it is precisely this that can permeate future generations.