Anyone who looks at cryptocurrency as a fringe financial development is greatly mistaken. Many factors ranging from increased adoption, valuable cryptocurrencies, sophisticated trading, and even the rise of sub-sectors like crypto gambling paint the picture of a true force within finance.
Crypto asset management is one of those secondary sectors within this industry that makes life easier. Investors in crypto can consolidate their holdings into one platform. This allows for improved portfolio management among other benefits. Therefore, a user with investments in crypto securities and Bitcoin gambling games, for instance, has a greater utility to participate effectively.
Crypto asset management is set to grow massively in the near term. An estimate placed this sector’s compound annual growth rate for the next five years at 20 percent. As such, any crypto enthusiast should pay close attention to the trends in asset management. Major players like BitGo Inc., Coinbase, Gemini Trust, and Cipher Assets are all scrambling for a piece of this lucrative pie.
The Need for Simplified Asset Management
Cryptocurrency is a more complex concept than regular stocks or bonds. Some have steered away from investing in crypto because of the perceived hurdles in purchasing and handling digital currencies. As crypto continues to garner more interest, it is necessary to have straightforward management tools for all kinds of traders.
The entire process of finding a suitable wallet, finding an exchange, completing a lengthy verification process takes out the joy from an otherwise simple investment. Besides, crypto holders often have to trade on multiple exchanges and diversify their holdings to remain competitive. Without integrated solutions, these processes seem daunting.
Unbeknown to such frustrated people, cryptocurrency is a relatively simple concept with seemingly complex sub-sectors like Bitcoin gambling games featuring familiar names like Blackjack and Bitcoin crash. However, with the apparent complexity of handling crypto, many never bother to find out.
There is a need for simple tools to keep track of and manage assets. Companies are now venturing into crypto asset management to simplify the process and consolidate their holdings. The fact that they get improved portfolio management tools is an added bonus.
These tools take various models. The soaring popularity of cryptocurrency after the 2017 Bitcoin Bull Run brought a record number of new people into the industry. In recent times, institutional investors are beginning to show more interest in Bitcoin. The number of crypto investment funds will only grow soon.
Therefore, there is a strong need for go-to tools to manage investments. Crypto asset management platforms seek to simplify the process of purchasing and managing crypto. This reduces the need for third-parties that could raise trust issues and added costs.
Crypto Asset Management Solutions Types and Growth Factors
Leading crypto asset management platforms have had tremendous growth in the past few years. They range from custody solutions, tokenization solutions, transfer and remittance services, trading solutions, or any number of those services.
The increased adoption of blockchain technology will be a great growth pull in the long-term. As blockchain solutions become more mainstream, users are finding cause to learn about crypto assets. These management solutions are in the right place at the right time.
Security is also an important consideration for people handling cryptocurrencies. Unlike fiat money, users don’t have recourse for theft and hacks. These management solutions give users the convenience of not having to deal with risky exchanges and wallets.
There have been several high-profile breaches in the past few years that have put the security of assets at the fore of every discussion about management solutions. These management solutions provide secure solutions to have a significant footprint in cryptocurrencies without incurring additional risk.
Payments and remittances are also a crucial component of cryptocurrencies. As trustless cross-border solutions continue to gain traction, simple management solutions increase in importance.
If cryptocurrencies are to gain mass adoption, the demographic of financially-unsophisticated, underbanked people is a potential goldmine. Integrated asset management solutions make cryptocurrencies easier to acquire and transact. Remittances are expensive for many people because centralized remittance services have little competition.
Trading is going to be another important growth factor for crypto asset management solutions. The example of Robo-advisors for stocks comes to mind. Crypto asset management solutions give prospective traders the ability to manage multiple portfolios.
Besides, having a utility tool to manage their trading ensures that trades and purchases are faster and more efficient. There are millions, if not tens of millions of potential traders who only need simplification to invest in cryptocurrencies. Trading is complex enough, and the logistics of purchasing and storing cryptocurrencies makes it a long shot for many people. Having an integrated management solution makes crypto trading a whole lot easier.
To Cap it Up
In the future, the possibilities and optimism of cryptocurrency and blockchain technology can only become apparent if more people can participate in a meaningful way. The best way to improve participation rates is to make cryptocurrencies simple.
These management solutions offer a necessary solution to an industry on the cusp of true greatness. Moving forward, the growth of crypto-asset management solutions will be front and center in cryptocurrencies advancing to the next level.