Expanding Horizons: Looking Beyond Bitcoin

Jason Leibowitz, Head of Private Wealth at Hashnote, discusses the evolution of the crypto market and the forward-looking strategies implemented by Hashnote to navigate this dynamic landscape.

The interview was conducted by CoinDesk Indices and is not associated with CoinDesk editorial. The views and opinions expressed are those of the author and not associated with CoinDesk. This is not financial advice.

How has Bitcoin’s recent halving impacted the crypto asset class, and what opportunities does it present for investors?

The Bitcoin halving decreases the supply of new Bitcoin into circulation by reducing mining rewards, thus curbing selling pressure from miners. Historically, these events have precipitated significant price appreciation in the following 12 to 18 months. While future outcomes are uncertain, optimism remains high for potential new all-time highs in the coming year.

How should investors be thinking about their portfolios in response to the implications of the Bitcoin halving and the evolving dynamics of the crypto market cycle?

Given the Bitcoin halving's impact and evolving market dynamics, portfolio realignment may be prudent. While Bitcoin's performance often sets the tone for market sentiment, diversifying across major cryptocurrencies could mitigate risks associated with single-asset exposure. Exploring indexes like the CoinDesk 20 Index offers broader market exposure beyond Bitcoin. Investors may find that such indexes help give an understanding of broader market dynamics and can be an asset to their toolkit.

How do asset managers like Hashnote aim to give investors exposure to the CoinDesk 20 Index?

Hashnote facilitates access to the CoinDesk 20 via its CoinDesk 20 Index Fund Series, streamlining portfolio diversification. This offering, part of Hashnote’s new Long Token Fund, simplifies the management of multiple cryptocurrencies by offering exposure to a market cap-weighted basket of the top 20 coins that make up the CoinDesk 20. The Hashnote CoinDesk 20 Index Fund Series offers an efficient and convenient means for investors to access diversified exposure to the crypto market.

The CoinDesk 20 just went through a reconstitution, per the public methodology, and added the NEAR Protocol. Would you like to comment on the reconstitution?

A notable addition to the CoinDesk 20 during the second quarter's rebalancing is NEAR Protocol, a layer-one blockchain renowned as a community-run cloud computing platform. NEAR Protocol stands out for its innovative solutions to common blockchain challenges, such as low transaction speeds and poor interoperability. What sets NEAR apart is its integration of artificial intelligence (AI) into the protocol. NEAR aims to democratize AI by making it open source, leveraging its not-for-profit and decentralized nature. This integration of AI is expected to accelerate development speed and improve user experience, in line with NEAR's vision of fostering an open, permissionless ecosystem. This exemplifies the CoinDesk 20’s forward-thinking methodology that now includes successful projects like NEAR that drive innovation in the crypto sphere, helping enable investor access to emerging technologies poised for significant growth.

What feedback have you received from clients and industry participants regarding the CoinDesk 20 Index?

Feedback on the CoinDesk 20 has been overwhelmingly positive, reflecting several key advantages appreciated by both clients and industry participants. Many clients have expressed the need for a reliable benchmark to compare their crypto investments against, and the CoinDesk 20 serves this purpose effectively. Additionally, clients are relieved that they no longer have to manage multiple wallets and private keys across various cryptocurrencies, thanks to the Hashnote CoinDesk 20 Index Fund Series’ one-touch, diversified access.

Industry participants have also noted the CoinDesk 20's alignment with the Markowitz Model of Portfolio Theory, which suggests that risks can be minimized through diversification. The CoinDesk 20’s market cap-weighted index provides efficient exposure to a broad range of digital assets, embodying this principle. Furthermore, the CoinDesk 20 addresses the difficulty clients faced in sourcing liquidity for smaller tokens and deciding which non-core tokens (beyond Bitcoin and Ethereum) to allocate to. Overall, the CoinDesk 20 has become a valuable tool for investors seeking comprehensive and efficient market exposure, facilitating broader adoption of cryptocurrencies within traditional investment portfolios.

Visit https://www.hashnote.com/products/coindesk-20 for more information.

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