Creating a Viable Asset Class: A Three-Step Approach

The recent US election has sparked discussions about the future of digital assets. To transform crypto into a fully functioning asset class, three key components are necessary: regulatory infrastructure, investment infrastructure, and an investment framework. The US plays a crucial role due to its favorable business environment and concentration of capital. However, regulatory clarity is lacking, with the SEC's "regulation by enforcement" approach deterring innovation. A clear path for financing and launching new blockchain-based projects is essential. Indices can provide diversification of returns and risk, offering a potential solution for regulators. The ultimate goal is investor protection, and a best-case scenario would involve a more crypto-friendly policy environment. With other countries competing to create a favorable environment for blockchain technology, active management expertise is necessary to navigate this complex space and capture growth potential.