Beyond Bitcoin: Strategies for Diversified Crypto Asset Investing

Transcript

thank you so much for coming tonight my name is Nikki CH and I'm the executive director of the crypto value Association um your are host Tonight We Are if you don't know us yet and I hope really hope that you do we are the largest professional association in Switzerland um connecting the crypto and blockchain Industry and building the ecosystem here in Switzerland and globally as well and uh this event is a testament to the strength of our community we have amazing speakers today um three quarters of them are CV members and Martin has traveled all the way from London to to host this event tonight so we're really really glad to have him here and all of you thank you for coming

Martin the floor is yours and thank you very much that's it work IDE I hope you can can hear me so yeah good evening uh and Welcome to our to our panel uh it's great that you're all here and and thank you Nikki for organizing the whole thing and thanks to the CVA very much appreciated so I'm the moderator today my name is Martin n and um I'm working at Market back for indexes um we are doing digital asset indexes since eight years now and I think what most of the people here that now we are not crypto amazing yeah so we are doing every s class and we are in the Nexus of PFI in crypto and managing

almost 60 billion in license as of management and I think that brings an unique perspective and you know perspective is everything um we could have named this panel uh not Beyond Bitcoin today but just Bitcoin given the markets are crashing so hard and I think that's that's the topic of today how to diversify um are there Solutions in play and uh I think it's really important not to over concentrate your portfolio and I'm glad that I don't have to do that alone so I have really great experts here uh sitting next to me coming from the largest Crypton native companies in

Switzerland um I think let's do a short intro first uh ladies first please over to you thank you Martin my name is Jasmine uh I work for 21 shares since about two and a half years uh we are a crypto ETP and ETF issuers we are currently managing a product Suite of 55 products with 10 billion assets under management globally all right let me continue hi guys I'm Dennis I'm from Bitcoin Swiss so we're I think one of the oldest companies from crypto here on the panel uh currently residing crypto Valley so we're of course Very crypto native you could say uh we have three main business pillars so anything from crypto trading brok uh cust the also staking um and

then where I'm residing in Bitcoin who is basically the invest and advice team so we're currently building building out Asset Management some of the colleagues are also actually here in the in the audience um and yeah I'm basically doing anything from investment strategy research and advisory the company good evening everyone thank you again for hosting this even it's great to be here I'm paavo I'm from Amina Bank formerly seber bank I hope I don't have to say that for too long um I like a true Investment Bank in my previous career from South Africa hedge my beted so I have two roles at am Bank I'm heading up the investment solution bus buiness where it's main pill of the ETP mandates as well as structur Solutions and on the other side mother job is really part of the dur trading

desk I'm in a sales and structuring capacity I've been with Amina just under a year and uh yeah looking forward to this engaging discussion thank you very much um yeah I think we have to touch on the markets given how sever especially in the I market crash is you now it is you prepare the panel you think you might have an Val and here we are it's it's the opposite and uh let's start with Dennis I know that you uh published something on the crypto super cycle so I ask you is that still valid is the cycle broken I me to to clarify it started out I was asked on a super cycle so it wasn't my idea but I basically to to give some background ideas I basically

said if any cycle could be super cycle or we see mask uh crypto adoption it would likely be this cycle um and I still think that holds firmly true on on average right so given also how we see basically a lot of Dynamics globally change liquidity Etc the markets have not been that great for some time but we also know crypto has actually been on a rally ever since especially Bitcoin right we see the administration change in the US and under the last four years basically crypto has been always yeah let's say marginalized people have been unbanked in the industry and that has been a full 180 degree reversal now so I think if we actually will see positive positivity in the crypto markets right also in terms of performance then I would say the Chan is the highest that

it will be this cycle or also our optimism then throughout this year especially mid year uh we we really Target more positive markets again and I think also then once we know uh New Economic directives trade Wars uhis Etc all that's going on currently with the new Administration there's some volatility in the markets but overall our optimism I would say for this year is still there and yeah let's see from the others maybe but I I would say overall we're we're stand behind that state that will be bullish here and we will see new alltime highs what's what's your opion uh I think I agree with you um especially what you touched upon the um regulatory changes in the US so we have really a pro crypto Administration which of course in the implementation

phase leads to higher volatility but uh overall I think everything what you said I can just second we see a more institutional adoption with the Bitcoin ETFs launching last year and the ethereum ETFs launching last year in the US and this is also a sign for the market that this a class is going to be maturing I mean absolutely Echo the sentiments mentioned I think I mean with recent events with pit hacking I mean you can see particularly with ethereum um there's been a support resistance level there so it's shown some sort of robust maturing ecosystem that has held its value um relatively um so agree with with my fellow panelists as well

okay so there is some hopium there at least that's good um when it comes to diversification um I think a lot of people make a lot of mistakes when it comes uh especially to altcoin investing and I know you said it there mean 21 shares a lot of products out there a lot of single tokens but also basket Solutions so how do you help your investors approaching this whole field selecting coins yeah maybe we need to go a step back here so if you want to construct a crypto portfolio there's generally two ways so you can construct your portfolio yourself or you can invest in a basket so when you do the portfolio

construction yourself you can almost do it as with a traditional portfolio let's say 6040 uh portfolio and instead of having bonds as a 60% or 50 to to 70% you hold the Blue Chips Bitcoin ethereum then you have 20% in growth crypto something that is maybe also thematic and then for the rest there is still some space for asymmetric bets or for high-risk uh or unknown uh players that only came onto the market recently so that way an investor can really Target what they want to have and uh calculate their risk metrics to it um and we offer as you said we offer I think by this

point 32 different single asset underlyings um important to say here is when we launch a product it goes through a very diligent due diligence process so we look at the use case also compared in the peer group in the sector that this cryptocurrency operates in we look at the liquidity and we also look at the regulatory viability um another Al is to go via an already Diversified basket and there you also have different options you can go through a market cap weighted basket you can go through a equally weighted basket or you can go through sort of more sector-based approach and I want to highlight because I I said 6040 allocation earlier um I want to highlight a product that we just

launched um it's called future we have 60% in Bitcoin and ethereum and some other smaller coins but these two sectors payment platforms and smart contract platforms are really the oldest and the longest standing uh sectors in the crypto space so we have the 60% allocation there and for the rest of the 40 we have have growing sectors like AI gaming we have tokenization um where you really get the exposure to the Diversified Market um I was talking about the market cap weighted approach earlier and what we found is that an inclusion for coins after 10 after the top 10 doesn't really make a difference

in terms of correlation so if you want a different exposure than to the top five or top 10 which is also already quite similar you should go via an equal equally weighted basket or via a sector um based approach yes so I think you also had very recently direct advertisement by the bip Tech right for the ETP products whether it's the ETFs in the US or the etn in Europe right um which I think very are very suitable for especially institutions um and how does it what what kind of role do the regulators play I mean I know that Switzerland is very open we have now new Bing rules in

Germany where basically the top 100 tokens coin now available um does that change anything in your product pipeline because as of now I know generally speaking in EUR but also yes is where single token focused so do you see more future event for these baskets are they getting broader do you have more sectors then more interesting sectors how is that I think for the baskets the breath will let's say in the next 5 years likely remain similar so we won't see a top 100 just because of the correlation aspect that I touched upon earlier but uh when you talk about the regulators and the regulatory changes um just to give you an example six Switzerland and

um the finma just implemented last year a rule that every crypto asset that is listed on six needs to go through additional so what they did before is they required a due diligence on the coin how does it work what's the supply issurance mechanism and this is part of our general ddq anyways so this was no surprise to us but then they also added hard caps so a cap a cap of 500 million for the coins of market cap then the coin needs to have a minimum trading volume of at least 50 million on the past 30 days and the coin also needs to have a certain age which is also not surprising to us so it didn't change

anything in our product Pipeline and in addition to that they really focused more on the custodians as well so in Switzerland they require a custodian to be approved by finma in order to have a product listed on six um I mean you you touched upon The Botch I think this is very comforting for investors that the financial regulator in Switzerland really does have an interest in the security of of the products um and with other jurisdictions like the us or the London Stock Exchange and UK with them opening up this also gives a sign to the market that the the market is maturing and that investors can have more trust and confidence in the financial products

issued yeah abolutely important it's also no coincidence that we have this massive flows in the US to the etss finally um I mean it's also a very strict regulation so far um but I think you see also some some spill over effects um to Europe um Carlo I know you're a derivatives expert right and uh we talked a lot about sport Investments ETP um how do you approach yeah the crypto landscape from a derivatives perspective um what are investors demanding is it de products is it C Core selling or um how how could I mention

that thank you um so at am Bank we have a unique setup we have a principal trading dud of desk um we take risk on the on the book and um we have quite a comprehensive range of hedging strategies and solutions we also have a structur Solutions business as well so it's go hand in hand but um what we have seen flavor of demand um leading up until the Bull Run of last year until January this year was typically the yield enhancement clients that speically sitting on a coin stack wanting to monetize their holding um or we've also had strategic exits so we've had clients that want to exit a certain prices and we've we've written covered cores and we man we actually run this in derivative mandates so we're one of the only banks

that actually run mandates on crypto derivatives and um so a variety of strategies to be honest um we have risk reversals where we can cheapen trades by buying puts within selling fors so it's really a combination that matches the client's view or the strategy that we determine up front within the Mandate but then we Al do D on an execution basis as well we have foundations that trade with us they manage the liquidity of their treasury function and um they're setting on their own tokens or other stacks and we manage their liquidity within a mandate or on an execution basis so from yield optimization to diversification we had clients that um have actually rolled off out of crypto and then want to get back in and we uh optimized core spreads with

risk reversals just to get you know leveraged parti a so there's a lot happening in the space more than I've anticipated to be honest with you but I assume that's very institutional and do we speak of Institutions as family offices or um or yeah I mean you're you're noding here not at all so it's it's a mixed bag so we have some RMS in the room that we work closely with uh we have private clients sitting on 800 BTC strategically wanting to deleverage and and rollof and we did Cover course matricies of prices andri strikes and terms we have foundations as I mentioned was more institutional flavor which is cring liquidity or hedging as well um and we have we have some asset managers who run mandates on behalf of clients of

the bank that do short putut strategies systematic short put strategies so we have quite a quantitative desk at the bank and we do these qualitative um strategies within mandates otherwise clients have quite a variety of needs so I mean given that um crypto is is very I would say inefficient it's less less uh efficient than stock markets um do you see more room for active strategies here or is there equally demand for for Passive strategies so semi passive I know you also have btp product for example is that even spit or is there is there a trend going on at the moment okay sure so we we have a hybrid Approach at under the back so we have

passive strategies mention TPS and our indices and um we have an Amex uh tracker it's our Flagship award-winning for it's one of the easy accessible broad-based you know capture the whole wamore the whole Market crypto market and one it's a a market cap and risk parody weighted um ECP and that's our Flagship product on the active side um we typically start with the same constituent raitings of our our passive index and then we have digital investment committee meetings on a monthly basis the ETP sorry re balances on a monthly basis and then from an active management perspective within mandates within AMCs we have asset

managers that delegated the the investment management responsibility to Amina Bank via a rapper being the AMC and we have monthly digital investment committee meetings where we pull together our research analysts our portfolio managers and our um yeah our analyst to refine our allocation so it's a combination of both but we start off with the passive constituent ratings and then we apply fundamental analysis to overweight or underweight and it go through a proper um process and meeting at a a bank yeah that's interesting I mean generally speaking I think most of the investors have really a problem first of all selecting the right coins right um I think we all be Bitcoin is a core investment but if you ask investors

the number two is already yeah you can put a question mark it was ethereum now ethereum is getting questioned uh people were they're convinced it was salana now um everybody is hating salana and so um yeah that's that's that's really the big question mark here and I often hear focus on fundamentals yeah and I think a lot of people don't know what fundamentals are in crypto and now then is that uh Bitcoin SS is doing something focusing on onchain fundamentals and I think it would help here for this audience maybe explain what what onchain fundamentals are or could be and what are examples points which have sound fundamental sure I mean so basically if

you think about how we always call it the right tread fi but in terms of equities normal stock listed uh uh shares basically of a company right you always then look at the annual report you see maybe the fundamentals what did they produce you net income statement Etc right but on the crypto blockchain then you really have all this onchain data basically available 24/7 it's uh it's live data of what's actually happening on the network so be it how many people are transacting how many people are sending uh maybe maybe money somewhere and how many people are maybe also then interacting with smart contracts so basically programs on the blockchain right and onchain fundamentals basically implies we can really see the economic activity the health and uh and gauge basically how vibrant is a certain crypto asset

currently um and now to to give some examples right we also have that in our Blue Chip index really have pre-screening mechanisms and say okay if there's not a certain amount of active users that uh sent through their uh transactions and we can track it from the sending addresses basically then this uh asset is not eligible right so we can really use we can really use onchain fundamentals to gauge uh any crypto project are they active currently uh what is the health and also what's the activity behind it right and then some good examples are of course really as I said you you can consider how many people are really active on it but you can also consider how much uh is the transfer volume maybe so not only are people active but do they transact in micro sense are they really sending like

in the case of Bitcoin hundreds of thousands of dollars usually in these transactions can I ask you a question yeah sure what are is an emerging fundamental that's I mean it's this is an an ecosystem that is it's it's a evolving every single day what would you say one of two emerging fundamentals that weren't here two years ago yeah yeah no it's it's an interesting one I would say always the new onchain fundamentals usually also uh Co coexist or co-emerge really with the new Industries or sectors we have in crypto right so a couple years ago uh gaming really came up now we have real world assets right so now suddenly we see someone like Franklin Templeton they have their tokenized bonds or Securities offering they want to put it on salana

so then suddenly the onchain fundamentals also maybe the real economic value of what's being tokenized or traded on a blockchain so would say the new onchain fundamentals they really prove themselves to be worthy with the new sectors and new uh yeah new new ways of looking at things right um or let's say for example hold ey Dynamics in Thea in the case of some social or uh Community token it's more important basically how many people are behind it whereas for something like ethereum it's more important how big are certain actors and what's basically the economic uh Power and and force behind them yeah list I mean speaking of fundamentals I think we also have to talk about coins without fundamentals so we can guess what it is it's it's mean coins um I

think that was responsible for a large push last year especially also salana chain it was the unor chain now we had all these Rock pools yeah with Libra and the Argentinian president Trump issued the Mee token uh I'd like to hear your opinion from all of you um do you think me coins I mean I hear that it's it's attention tokenized and all that stuff internet culture but um do you think it belongs into an Institutional gr portfolio or is it a separate bucket how do you handle that yeah no it's a good question it's also very controversial we also had that when we set up our index basically will we

include meme coins yes or no um so I think there's definitely an investment case behind it which is somewhat controversial already and as you said already yes there is no fundamentals but then also this sort of community mimetics behind it or attention surrounding certain uh actual meme coins and of of course not what you said some rock PES or pure uh pure Farm tokens that are basically issued just to to get the money out of investors that buy these tokens then I think there is some Merit to some of them but that is a very select few and I think that's then also the few mem cones that stand the test of time basically so the the one that everyone probably knows is Dogecoin right I think also Elon Musk is always talking about it here and there um I think those products as a very very high risk

allocation for let's say the the additional Alpha in a product you can add but it would certainly not blindly let's say set up a meme coin basket and call that diversification because that's then also over diversification or diversify into BS usually right so uh in in that case it makes sense to have a very few selective bets it also then matters when do you diversify so you do not want to diversify at a market top and then hold it for three years you maybe want to diversify into meme coins and these social tokens that have active communities when liquidity is easy when the bull market is there and uh the crypto ecosystem is very vibrant so there is a very cautious approach to it but then I would say definitely you can include it in a diversified product but to a limited extent with the intend to

not hold it forever and to a limited extent yeah yeah of course look I mean I think short answer the narrative that we see that me a bank is that it's it's not an Institutional narrative the spot ETFs with um you can see standard charted Morgan Stanley all climbing in and um there it's almost becoming an integrated landscape between traditional and and um well it's it's integrated landscape to having digital assets within a call it a traditional portfolio from an Institutional perspective I don't see the case quite yet I sorry to be counter but um it's it's still from a very

because the industry is maturing from speculative trading to more institutionalized strategies um that's the way it's going that's why Bitcoin is hold its dominance at 60% that's why value is been locked in the ETFs and you haven't seen the rotation into etherum and then dripping down into a b offb rally our view maybe as a regulat bank have to say the right things but uh we still see you know I think the narrative in the future as this unfolds is it has to have a specific utility um and with without that I struggle yeah I mean it's interesting I think I don't know if that's valid today but until recently Doge outperformed Bitcoin right since Inception so it's hard to to gr what that is this rantic thing so how how

does 21 shares handle there I think that's a very good question on how to grasp these things really because I would say mcoin doesn't equal mcoin and you touched upon Doge doge is the first meme coin ever it was launched literally as a joke on a dog that is now dead but in the meantime a lot of things has happened uh I I did the research and I I was just curious what you can actually do with do and you can do quite a few things you can buy Tesla merch obvious because Elon Musk is a big supporter of Doge but you can buy Microsoft of products via bit pay you can buy airline tickets on air Baltic with Doge and we see this increasing utility for Doge we also see that they did some Char

charitable causes so they raised three 30k for building wells in Kenya all Community Driven they sent the Jamaican Bobs team to the Olympic Winter Games 2014 and I think these are things where people are not necessarily aware of because everything gets put into this one meme coin scam bu Market um also if we look at the fundamentals of Dogecoin we can see that this is a disinf disinflation oh my God this inflationary this inflationary thank you asset where the inflation rate is set in the program so every year a certain amount of Dogecoin gets released and with the increasing Supply the inflation goes lower and lower um store of value this

is a highly controversial of Dogecoin one could say yeah it is a store of value what you touched upon of Internet Community but given that this inflationary characteristics maybe in the future this will be a certain store of value as well besides the uh internet Community yeah so small anecdote here we have a mecoin index and do is a part of it and sometimes you get a storm and X where people complain that do is in the mecoin should be there too much utility token yeah so it's really it depends on the active here I think the bottom line what I'm hearing emerging out of this discussion is that mean coins have okay there's the headlines and then there's potential for

specific utility and we can't fully predict you know it's it's disruptive there could be a specific disruptive value there and I think so you're quite right it's diversification requires a bit of allocation and to adapt different Cycles but um it needs that emerging property I still believe yeah absolutely so I think maybe we should focus should focus on the more serious stuff and uh the problem is that crypto is so narrative driven and these narratives are very short term right we have this AI cycle we had the mean coin cycle uh then also we had rwa and all that stuff so yes mean what you see as a

maybe more sustainable sector or trend establishing maybe for this year or going forward which which has more traction than just for a few weeks or do we stay there and they have constant rotation every five weeks or so what is your opinion I think what you said about tokenization uh is very interesting um because I do think tokenization along with stable coins will be something that won't go away um especially with the regulations such as Mika or also the US changes um we see more and more institutions wanting to tokenize real world assets um if you think about it what it is it also

makes sense it makes the operations much more efficient it gives you 24/7 liquidity and it also gives a lot more investors the access to these tokenized assets um alongside with the tokenization and the pro crypto Administration in the US I think defi is something that will um not go away um um because you really have a sustainable revenue generated from these CI protocols and uh we hope that with the US um with the US um changes that this will also go more to the investor and a third thing is also something that you mentioned the AI narrative I think it's

more than just a hype because if you think about how AI learns it learns based on huge data models what is the beauty of bit coin and all other cryptocurrencies that are based on blockchain everything's open source so an AI model can learn incredibly fast and Incredibly efficient based on the data on the Chain which then can be used to uh improve defi um activities or defi protocols and also AI agents based on on the blockchain yeah I mean I think you have 650 trillion with a te of chain on assets and I think on chain RW if if you count um stable coins into the mix it's 250 billion something like that so

there's a huge potential and I think Carlo what what is your opinion on this tokenizing thing rwa is that topic for Amina and and how do you see that so tokenization um I mean it's a major theme and uh very good arguments and points there I mean we haven't seen the Breakthrough that it's it's just but the Breakthrough it deserves I think what you know for tokenization to be material it has to have some form of um uh um call it major efficiency gain faster cheaper much more features than the traditional systems right and not to

Rite it off I mean you've seen Black Rock you've seen UBS they have tokenized money market Investments you've seen um uh SI a digital Bond um great concept but the adoption rate unfortunately is remained low where I think it could take off um is it requires a bit of a cap list I think I've seen you know service tokenization come into play quite interesting saw MasterCard don't if you guys saw it this week uh made an announcement by 2020 203 you will not have 16 digits on your credit card it'll all be tokenized every single payment will be validated on the blockchain security security your security um all recorded and I think that is that the disruptor that I was talking about

earlier that I was alluding to earlier you got that and then you have that major efficiency game which could lead the way for tokenizing assets as well and you don't know where this thing goes it can it can really disrupt Healthcare Financial system uh information uh digital digital security um so it's it's got a it's got big legs to stand on but we're just waiting for that major efficiency again it's almost like Amazon it was a bookstore it had it now becomes This Global Powerhouse distribution disrupted everything we need that kind of event organization but absolutely for me and the way Bank sees it it's uh certainly something that um we're waiting to see to happen but it will happen that's interesting I mean if you think it through long term and let's say

by 2035 maybe we just have a wallet and we have our equities yeah our bonds Commodities the crypto assets the music nfts everything in one wallet I I question what is then a digital asset yeah so I'm I'm running research with digital assets but what is that then yeah so and I know you work for Crypton native companies and I don't know if you can talk about it I think is other longterm um ideas then also to cover other asset classes or do you think there will still be niches where you say we are focused on on crypto assets because I question that all the time

what does it mean for indexes for example yeah uh do we need broader indexes do we have an all country worlds so to say and in in digital asset which compiles everything um I know that's out of the book but I think it's an interesting question what year are you in 2,500 no I think years I think people who who are it's going that way I mean what we see UN Bank is um portfolios first they BEC unified so just digital Assets areed Now with traditional asset lasses the next question is can I put this on the blockchain can I so absolutely it's most certainly trending in that direction um

whether you have one wallet and 10 holding everything um could be I mean it's just really a longterm thing longterm thoughts so um um I don't think we have to worry about that to right there is plenty of room focusing on crypto assets but that's always in in in my mind and so um I just wanted to hear your opinion I I don't think you have to tokenize everything necessarily even I think a lot of things will always stay let's say non-digital in the real world but it's always about the access I think you you mention also quite a lot in terms of tokenization and the access and what can come but that's also then a very important point I mean the large

majority of the world at this point has a banking access but brokerage access is still almost non-existent except for maybe the Western European part or the United States maybe um amongst other few so I think the unbroken part of the world is something like 80% so in that case the actual adoption but also would say uh yeah let's say the need or as you said the Catalyst still has to be there for some of the digitalization or blockchain native access maybe to happen but I think you do do not always need the blockchain which is funny to say because I'm actually a very big crypto Enthusiast right but a lot of things you do not need to force always on the blockchain necessarily a lot of things work great as they are maybe you digitalize the access but not everything will necessarily end up on the

blockchain I believe I think I I agree with h what you're saying because like the equity Market it's super efficient so I don't see a need for this to be on the blockchain and I think we're still very very early I think we we will have such a portfolio maybe or such a wallet with everything inside the moment we don't talk about the blockchain anymore because the blockchain itself is a boring concept it's like how it's similar than how does Wi-Fi work no one knows but everyone is using it and I think when we reach that point uh in in crypto then we can talk about what is a digital asset surprising to hear that from from Crypton but maybe you're wrong um I also

think it's a lot about yield right um You Want To tokenize bonds and you have that on chain and then your stable coins that yield generating um speaking of yield generating I know you you have a lot of staking products also out there is that high in demand because I obvious here that in US staking could be applied for ethereum and that's the the great game changer we see much more demand is that the same here in Europe can you say that people want that does it is it a game changer uh if it's a game changer um well I don't know I think that needs to be decided by every investor themselves but what I can say is that more and more investors are getting more into the crypto details so more people

are asking about staking people are asking question when the product is not staking but could be staking um we also see um we see like great collaboration with the regulators and the tax authorities here in that regard so for example we are reporting our staking rewards to the Swiss tax authorities when you buy an ETP you can profit from the seamless integration in your normal portfolio and have the staking rewards automatically reported to the tax officials um I think the more people are getting aware of it the more it will be in demand even more than now yeah yeah absolutely I mean a bank we one of the in our mandates and even just on

execution basis we have many clients that have staked assets and we write derivatives over it so they're getting yield on yield and it's now a common how do we juice this thing up and um for sure in fact becoming the most traded product at the moment is St assets with covered calls or short puts to get the additional yield they want the base yield as you said or even like wrapped assets yeah that you take your staked assets and rep them so you can still use them in defi applications that's really something where we notice investors get more up to speed with what's uh happening in the crypto market and how things function there I think what's maybe also important to point out there on top it's not only let's say the actual yield for staking but of times a lot of crypto

assets uh for those who don't know you actually have fee sharing models so it's uh let's say the company pays a dividend for all its customers and if you're not willing to open your hand basically and say hey I'm uh willing to take part in the actual yield that's being distributed or fees that are being shared on let's say certain defi applications right um then you're actually also missing out so you're often times also getting actually diluted if you're not managing uh a yield product or not getting the staking reward so I think that's maybe also what cost less uh success in the launch of an eth ETF because you know you have your eth but you do not get a staking yield so basically there's a 4% annual dividend give or take and you're not being uh allocated that dividend so you're effectively being diluted by 4%

annually so not getting the staking yield so the new issuance or let's say the an the anecdotal Bitcoin mining issuance so not the newly issued e you're getting but you're also not even getting the network fees uh and the and the let's say Revenue the crypto asset is generating so it's even a dual sided sort so you're missing out on both ends if you do not have a yield product but you take on the risk but then you don't get comp top yeah yeah so so it's even worse I think we have to start Q&A soon right but I I have one question left all of personal interest for my own portfolio of course it's not Financial what what would be your top three picks besides Bitcoin e could also be an ETF or broader broader basket anything else

uh grp related of course can be stocks crypto stocks so um what yes me what really I'll go with uh with my portfolio approach that I mentioned earlier so I think I would put 60% in Solana because I think Solana is uh is still good and I mean ethereum Solana can coexist we also have apple and Microsoft with our operating systems then I would put 35% in Ono because they are taking care of real world um token ization real world asset oranization and then for my asymmetric bet I'll choose Dogecoin there's your mecoin answer it's just right it's a little bit

Yeah but maybe you should buy the mean coin that's approach yeah so Dennis what's what's your super portfolio yeah it's always funny because people ask me that then when I talk privately they know that I'm quite deep maybe into some altcoins are really crypto native but publicly always they actually what you don't want me to say so Bitcoin and eth but it would actually go so far saying sure stay in Bitcoin right but we also do not know exactly which assets tend to survive in one or two cycles so if you really want to surv survive say multiple Cycles diversify bit broad I would actually stick it rather to sectors and sector winners and I think what's definitely going to perform well in the future is still the defi sector we always need uh liquidity we always need yield and financial vehicles to trade on

the blockchain we also always need layer ones in infrastructure so would definitely say uh do not rule out that sector and go with whatever is the leader which currently is the 60% salana weight and and maybe some etherium currently as well um and otherwise I would say sectors that are really high potential currently are really real world assets and uh AI for sure as well so go go let's say with the leaders there in the market dominant players in those sectors and usually that that evolves anyways after one year if you look again at a sector and who's the the market cap dominant player uh the pictures are totally different one so I would say stay flexible uh and see how the Cycles evolve some some not so serious stuff okay

Ser um before this not supported in Amia Bank we don't have this it's just Beed here um p p I hav know how to pronounce it this seems like an interesting meme que it ties in the AI narrative AI which is it p p p p African accent can't get it right um yeah s in the AI narrative it's creating AI content um to play but uh yeah okay that's cool I would say we can open Q&A I let you choose so if anybody has a question please raise your hands and Mar okay yeah go ahead I got a question so

basically over the past month the Market's going pretty sideways so if I just recently got into the market and asking me I would like to get returns now in just watching the market daily seeing things shopping cers what would you maybe propose um or what Solutions are there question the for the recording for the recording so I can repeat the question yeah yeah I fully understand it and is the client spelling position native crypto or is it f it's okay so the client sitting on bitcoin Market is consolidating going sideways or slightly dripping down what strategy would am Bank propose for this

client um so I mean this is a classic discussion that I have every single day with clients um we have a derivative book and for us clients typically want to you know sweat their assets Bitcoin you can't get any staking so typical we run quite a few covered core mandates where we have different risk buckets and we Lun the Str together so one of the proponents I would propose is basically whatever their Benchmark is we would run to discretionary syst systematic cover core strategy but with discretion and this week we put on no trades as an example okay any addition I was also about to say this sounds like a perfect case for covered call

strategy oh I would say zoom out check where you're in the cycle check the market risk and uh maybe double down on the on the prices if the market positioning look favorable yeah maybe now but it depends also of course on the on the pattern or let's say the risk profile right how long is the investment Horizon but usually I think if you're already in Bitcoin then you want to hold it for a bit longer so consider if you want to rather double down as I said buy more or if it's time to maybe get a little bit out of the market and currently the time is is not to get out of the market getting more risky I like them yeah connected to this do you still believe that the price will go to 180 this year according to the Outlook report yeah maybe for some background so I think we

all said that in our uh recording for the Outlook and I said I think the price definitely going to end up above 150k this year um and then the Outlook Target which we also iterated our first issued I think one and a half years ago at this point was 180 to 200,000 for this cycle um and actually the funny thing is as as you go throughout the cycle the magnitude becomes smaller right so once you're already at 100,000 then it's just an 80% move which now for the the traditional portfolio or something like the S&P sounds exuberant right but if you look at past cycles and usually Bitcoin tends to 10 20 30 x from the cycle bottom and of course it's a a total Bubble at the end of the cycle right so you really have we have our onchain risk metrics we have price risk

metrics you really see them all flashing red and it screams get out of the market right but in terms of what we see in the market and the potential that we can have also then once General markets ease or more liquidity flows in the system I think it's still relatively likely that we end up in those uh those numbers or digits fingers crossed I see here for those that don't see it um but but actually I think it's quite likely and also to be fair in past Cycles Bitcoin has really been led by by let's say hype or a lot of new market participants entering but also liquidity increasing and if you look at all those models and currently Bitcoin has been ring purely of fundamental changes so the ETFs uh the new Administration everything has been easing the market and actually Bitcoin had should have performed worse

you could say and the good performance was due to fundamentals so there was no hype yet in the market which sounds funny right cuz Bitcoin was at six figures we dreamed of that maybe in 1617 already but the hype in the market was not even there and we traded at 100,000 relatively easy based of fundamental improvements for for the industry so it's good tell when you have political risk being really resolved have um U inflation data coming out um tariffs could be well beded down and actually have a very small triple effect three I mean then you have that Tailwind effect with a fundamental fundamental so stick to your guns yeah I hope so you have options on

bitcoin option yeah yeah okay Y and Exotics as well yeah and we have a um I mean thanks for the question so we have we have a principal trading desk where we cents take on Cary bis bank and we do combinational strategies using the veners and we also have an SPV that you have no credit with to mina bank and we issue ex structure products which are really just supported products from the traditional World accumulators de accumulators sh notes Capital protection notes order calls Etc so we have the that's a it's a beautiful thing about working in a bank in an investment Solutions business you have a comprehensive Suite of products and services from to cater from RE all the way to asset manager I mean I have a

we're on boarding some funds that are going to be managing um derivative strategies plus Structured Products on crypto within their own fund yeah and we're going to be coming up with our own AMC which will be a market neutral short ball strategy as well so thank you you can shut up to it as well yeah two questions so one which you know you say Bitcoins will be whatever 150 180 which is the formula used to determine this price how do you attribute price to in the class discount do you need any other call now now the second question is maybe a bit more tricky even though I

would say it's maybe also easy to answer in some reg regards but I mean how how do you measure it right you of course do not have any cash flows you you cannot say it's like a business that generates revenue and and people pay for it um so how do you model it right and the best way how to model it is basically really Network effects and how also then certain internet stocks or internet networks have been adopted and then if you zoom out on bitcoin you really see that perfectly on a chart you see that logarithmic exponential Trend how it's basically growing and being adopted and you could have modeled it from 2013 onwards already and you would have basically been pretty much in line of How It's been adopted and you see that also it's been played out that way for any Internet stock um going now Beyond

Bitcoin it's also been for ethereum actually how it really recruit users but also drove Revenue it's very similar to meta to Microsoft to any other network uh or or Internet Network how it's been adopted and and yeah basically found it place in the market um yeah so so I mean if you then look into those parameters and really dig down into the data then you would really come up easily with a price target of of what I mentioned earlier and that's then even on the let's say average to moderate end so in in a pure bubble phas and all the models would still not flash anything if you go to 300,000 but that's then really taking a lot of liquidity and hype in the market and you will of course come crashing down um the second question is yeah of course you can say

you don't need anything other than bit Bitcoin um and of course you need Bitcoin but there's there's still a lot more to crypto than just Bitcoin so of course Bitcoin we don't need to debate it's very important it will always be the most important crypto asset but you still need crypto infrastructure you still have a lot of other functionalities such as def AI real world assets um so they all have their place in their Merit um so so the question is then not do we need anything else but Bitcoin but Bitcoin is let's say the Google that drove the whole internet topic but then we have all the other internet companies that we still need use and are happy that they're there and they're they're disconnected they're independent from it maybe to make some comparisons to like real world examples you could see Bitcoin as a

emerging store of value so a method to Value Bitcoin could also be to compare it to Gold because they share same characteristic they are both scars they're both divisible they're both uh have a limited Supply although you can say Bitcoin actually has a limited Supply and one day we will go to Mars and mine gold there um but then as you said we have the infrastructure we have the operating systems the apples the Microsoft the linuxes of of blockchain which is Solana ethereum SOI we have apps like when you go on your phone that is running on o on an operating system you go into the app app store and buy or get different apps and we have the same on the blockchain we have accelerators

that make blockchains more efficient the infrastructure layers such as arbitrum optimism which are on top of ethereum so there's really a whole ecosystem I wouldn't say like a blockchain is a blockchain because they serve different purposes whole portfolio I I would probably stick with traditional magic because you know said just for the whole portfolio right I think something like traditional uh also markit portfolio optimization whatever it's it doesn't work that well usually for crypto right so you should take different approaches and in terms of

risk I would say usually we're in crypto because we want uh the alpha out of it so would say stick to the upside volatility which probably leaves in terms of tread F metrics maybe satino ratio um but it doesn't make sense to really analyze the volatility or the draw down right because you're in it for those exuberant performance uh returns of maybe a 10x and and then you scale down the position again so I think upside volatility and risk is what you want to consider but not uh not the draw down maybe but you can use the draw down and negative volatility measures as well if you are just having crypto as part of your traditional portfolio and what you will actually see is that the risk return performance is much better and you're just increasing the the

volatility minimally with like a 1 to 5% allocation but your reward is really getting higher yeah on the back maybe Al Another question on the onchain data so there's kind of a technical analy a qualitative anal also onchain how important is the onchain part I would say it's actually the most yeah I mean let's take stick to bitcoin because always the best to gauge the market right and then I would say the onchain data is almost as important as the the general fundamentals in the world or liquidity or Price data

um but I would say it's definitely very very important so if you just want to basically gauge the risk of Bitcoin let's say as a crypto asset and you can use it with almost the same accuracy just based off onchain data as if use price risk or use liquidity in and outf flows so the the result is ironically almost the same even though you come from a totally different standpoint and I would say that's and also the the beauty of why onchain data works and is so important because you come from a totally different angle but you basically end up with the same result in the end purely based of onchain metrics so be it anything like the realized price so basically one was the asset Bitcoin in this case last traded and what would be the implied market cap based just on when it actually traded

because we can basically then say at which price did the stock trade and what does the company actually worse based off of the of the trading price in the market and a lot of other metrics that are similar to this work perfectly well um so so you can almost live entirely off unchain data to really get your way around in crypto yeah maybe I can comment on that because we have also an index focusing just on on onchain fundamentals and active users and fees and while it doesn't necessarily perform better than a normal market cap index I think it gives you some protection that you at least are invested in tokens which are used and which have economic traction yeah they are users are paying a fee for the

service of this protocol and I think longer term it's I want wouldn't say necessarily it's a quality signal um some research is um doing quality assessments why these unchain fundamentals and I think it's too early yeah we don't have enough time series but um at least gives you some confidence that you are not stuck in in protocols which are just dying and so I'm a great fan of that but um we definitely need to do more research on this yeah I see another question do we have some time left one more I think one more okay okay talking about divers diversification um what do we think

about real estate token tokenization there R way that's the B use case that should have taken off right um property rights tokenized um yeah I mean I can't comment for that something that I would have thought would have been really one of the major efficiency games to be honest with you fractional ownership don't know if you have anything fully agree I mean you want you want to basically tokenize what's a liquid right because the benefit of tokens and and small units is basically buying a share of something you cannot afford So it's b it's basically the decentralized crowdfunding version you can buy a token on a Sunday evening from your couch basically and and get

invested in real estate or a part of a Picasso anything you basically want to tokenize and make small fractions of on a blockchain so as you you said start start with what's what's obvious or where it's it's the best for efficiency gains yeah maybe a point to this maybe we will see it in the next two to three years maybe we go with the bonds first and everything because bonds is like a more well-known Essa class real estates is still like an alternative Essa class so I think it will come definitely but at a slower Pace yeah thank you very much um thank you to the panelist there