Crypto / Web3 - Navigating the Waters
Updated: Jun 21
After a volatile 2022 market, what are things to consider when investing in cryptocurrency in 2023
Institutional investors face several challenges when investing in the crypto markets, including:
Regulatory Uncertainty: The crypto industry is relatively new and largely unregulated, which creates a lot of uncertainty for institutional investors. There are different regulations in different jurisdictions, and many regulators are still grappling with how to regulate cryptocurrencies. This uncertainty can make it difficult for institutions to determine how to navigate the space without running afoul of regulations.
Security Risks: The decentralized nature of the crypto markets means that there is no central authority to protect investors from hacks or frauds. This makes it difficult for institutions to ensure the security of their assets. They must rely on their own cybersecurity measures, which can be costly and time-consuming to implement.
Market Volatility: The crypto markets are notoriously volatile, with prices fluctuating rapidly and often unpredictably. This makes it challenging for institutional investors to manage risk, particularly if they are investing large sums of money.
Liquidity: The liquidity of the crypto markets is relatively low compared to traditional financial markets. This can make it difficult for institutional investors to buy and sell large amounts of crypto assets without impacting the market price.
Perceived Risk: Many institutional investors perceive cryptocurrencies as being too risky or speculative, which can make it difficult to convince decision-makers to allocate funds to the asset class. This perception is often based on the lack of regulation, security risks, and market volatility associated with the crypto markets.
Overall, institutional investors face a unique set of challenges when investing in the crypto markets. However, with proper risk management, due diligence, and an understanding of the underlying technology, institutional investors can potentially reap significant rewards from investing in this emerging asset class. Below are a few crypto articles of interest that we found useful:
Despite Crypto Winter, Digital Asset projects are still thriving - the article explores the innovation and sustained growth in digital asset projects
Crypto Developer Report - track the growth rate of the crypto developer market with these charts
Forbes Blockchain 50 2023 - Despite 2022’s crypto market collapse, dozens of enterprises around the world are still investing in blockchain. Here’s the 2023 list of the top 50 enterprises still focusing heavily on blockchain.
AltGate has recently onboarded two funds that specialize in navigating the crypto markets. Both teams are highly approachable and open to discussing any questions or concerns related to the space. Get access to our marketplace to learn more information on the strategies and more.