Ten years after the launch of Bitcoin, there are still many questions and few simple answers about digital assets and the underlying technology that makes them possible: Blockchain. Blockchain predates the advent of Bitcoin and is only one example of distributed ledger technology (DLT), which originated as a more efficient and accurate means of recording transactions and has potential applications far beyond the realm of digital assets. While many have heard about Bitcoin, it’s worth noting that there are more than 2,500 cryptocurrencies circulating in cyberspace thus raising the question, are digital assets becoming traditional?
In the view of those who attended our recent webinar addressing this question, the answer is not quite yet. When polled, only around 23% of the attendees had any exposure to digital assets either directly or through a fund. A majority believed a stronger and clearer regulatory framework is needed before these assets truly become mainstream. However, more than 80% agree that Blockchain technology and cryptocurrencies are here to stay, underscoring the need for asset managers to develop expertise and strategies around digital assets.
Our webinar focused on crypto readiness and strategy, with shared insights from Anthony Tu-Sekine, Head of the Blockchain and Cryptocurrency Group at Seward and Kissel, and Daniel Nikci, Managing Partner at Applied Fund Solutions, a service provider that is using SS&C Advent’s Geneva® platform to provide accounting information on the cryptocurrency investments that their clients are making.
In the 45-minute webinar, the panelists answered questions from attendees and broke down a wide range of issues of concern to fund managers and administrators, including:
- The state of crypto adoption as evidenced by recent high-profile industry surveys
- The complexities arising from in-kind fund contributions of cryptocurrencies from investors
- Whether virtual currency or tokens are commodities or securities, and the tax treatment implications
- The evolving custodial landscape for digital assets
- The future of “tokenomics,” and why tokens will likely become more than a medium of exchange for cryptocurrency
The intense interest in digital assets suggests that the day they become traditional is not too far off. Some firms are further along than most in developing the infrastructure needed to support and account for these assets. SS&C Advent supports clients with solutions that serve thousands of firms including firms that are leading the charge and investing in digital assets. If you did not have a chance to attend live, watch the recorded webinar to start to get up to speed on this rapidly emerging marketplace.